5. Savvis (Nasdaq: SVVS)

Hosting is hot, but Savvis brushed up its balance sheet, too, and the combination sent the stock soaring, even after compensating for a 1-for-15 reverse split in June. Investors who stuck around after the stock's early 2005 nose dive should be pleased.

Savvis isn't done remaking itself, either. Just this week, the company announced the sale of its content delivery networking business to Level 3 Communications Inc. (NYSE: LVLT), bringing in money that will go toward building four new data centers. (See Level 3 Spends $135M on Savvis CDN.)

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4. FiberNet Telecom Group Inc. (Nasdaq: FTGX)

An 83 percent decline put FiberNet on the wrong side of the map last year as our No. 3 stock pain. But this year, firmed-up pricing and increasing demand is boosting the data center and transport business -- great news for FiberNet, which runs 16 carrier hotels on its network in the New York and Los Angeles areas. Cost-cutting, after a failed 2004 bid for the telecom slice of Con Edison Communications Inc. (NYSE: ED) helped, too. (See FiberNet Buys ConEd Network and Con Ed Sells to RCN.)

Note that this isn't the same as Fibernet Group plc, the U.K. property acquired by Global Crossing last week. (See Global X Makes Offer for UK's Fibernet and GCUK Closes Fibernet Buy.)

One downside is that revenue growth could stall, as FiberNet's data centers are at 85 percent utilization, analyst Colby Synesael of Merriman Curhan Ford & Co. reckons. But the plus side is that demand should keep growing, and FiberNet's footprint could make it an acquisition target. (See Who's Going to Eat FiberNet?)

3. Internap Network Services Corp. (Nasdaq: INAP)

Another reverse-split beneficiary, Internap finally broke out of penny-stock status this year. Internap's managed services include faster and more efficient routing offered to other service providers; it's also got a foot in data center services and business-to-consumer wares. The company has racked up losses since the downturn but might finally turn a profit this year -- net income for the first nine months was $1.4 million on revenues of $132 million.

As far as building for the future, Internap recently announced plans to pick up audio and video streaming services by acquiring VitalStream Holdings Inc. (OTCBB:VSTH). (See Internap Expands and Internap Buys VitalStream.)

2. US LEC Corp. (Nasdaq: CLEC)

The east-coast carrier finishes the year awaiting the close of a buyout from Paetec Communications Inc. (Nasdaq: PAET) Privately held Paetec will get a public listing out of the deal, which would turn the two firms into subsidiaries of a publicly held holding company. (See Paetec, US LEC Merge.)

U.S. LEC's standout performance, like many, can be attributed in part to a disastrous 2005. But investors obviously think the company is in the right place, as it expands both its footprint and its service offerings.

1. NaviSite (Nasdaq: NAVI)

It's been years since we've heard from these guys, but this year's theme of data centers and services helped boost NaviSite back into the land of the living.

The company's services include application management, software consulting (on products from folks like Oracle Corp. (Nasdaq: ORCL)), and data-center hosting.

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PAINS

Of course, no year is all sunshine and roses, and the baggage of the downturn kept dragging on some of our top "Pains" winners. Just missing the list was FTS (London: FTS), whose shares on London's Alternative Investment Market (AIM) dropped nearly 60 percent. But others had an even gloomier 2006...

5. Orckit Communications Ltd. (Nasdaq: ORCT)

We do appreciate that readers pointed out the omission of Orckit on the "gains" side of last year's list. Really. But the numbers don't lie: The parent company to Corrigent Systems Inc. took a tumble in 2006, giving back nearly all those gains. The packet add/drop multiplexer certainly has lost some shine, as what was left of Corrigent competitor Luminous Networks was acquired this year by Adtran Inc. (Nasdaq: ADTN) for an undisclosed sum. (See Adtran Buys Luminous Embers.)

Orckit shares have been on the rise since hitting $7.33 in October, so maybe things are looking up. But who knows -- with an average trading volume less than 200,000, this is one of those stocks that's subject to vicious mood swings. (See Orckit, the Killer Stock.)

4. magicJack VocalTec Ltd. (Nasdaq: VOCL)

You might recall VocalTec landed on the 2004 Top Pains category. Things didn't improve, and the veteran VOIP equipment vendor was headed for oblivion when, in November 2005, an unusual merger with media gateway vendor Tdsoft Ltd. and a subsequent 1-for-13 reverse split put VocalTec back in good graces with the folks at Nasdaq. (See VOIP Pioneer Faces Meltdown , Tdsoft Saves VocalTec, and VocalTec Effects Split.)

From there, though, VocalTec got back on the downhill slope. On the plus side, the company does expect revenues to double this year -- to just $9 million.

3. Tut Systems Inc. (Nasdaq: TUTS)

It would be even worse if Motorola Inc. (NYSE: MOT) hadn't offered up $1.15 per share for Tut -- $39 million total -- as an early Christmas present. (See Moto Taps Tut for $39M.) Tut helps Motorola bolster its IPTV story, helping its new acquirer in the battle against Cisco Systems Inc. (Nasdaq: CSCO) and Scientific Atlanta . It wasn't just the depressed share price that made Tut attractive; the company has some MPEG-4 technology that's probably going to come in handy.

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2. Eagle Broadband (Amex: EAG)

Back in 2004, Eagle topped the charts at $66 a share. Today, all those profits have fled the nest, as the provider of broadband and satellite access services has seen revenues decline every year since 2001, while recording stunning losses in the tens of millions per year. A 1-for-35 reverse split in May (Eagle had closed 2005 at a price of 9 cents per share) didn't turn out to be the right cure.

The company's slide hasn't gone unnoticed. Early in the year, Eagle found itself embroiled in a lawsuit, as it claimed Internet message-board posters were trying to manipulate its stock price. (See Eagle Sues Internet Posters.)

Eagle's attempt at a revival involves a 250-channel IPTV service that it's offering to operators and to multidwelling units (condos, hotels, etc.). The service streams from a super-headend facility in Miami, Fla., that went operational at the start of October. (See Eagle Builds IPTV Headend.)

1. Path 1 Network Technologies Inc. (Amex: PNO)

Not everything video-related turned to gold this year. Path 1, which sells video gear for live transmissions over IP and for cable video-on-demand, decided in July to start seeking "strategic alternatives" -- including a potential reverse-split that would reduce the number of shareholders enough to get Path 1 delisted. (See Path 1 Seeks Alternatives.)

Not that it means anything, but it's interesting to note that the bottom two stocks this year were linked together in a 2002 deal. (See Eagle Flies With Path 1.)

— Craig Matsumoto, Senior Editor, Light Reading