if I rent a VPS to mine the litecoin, will the VPS service provider ban my account? It's using KVM.
I good provider shouldn't ban you maybe if you was taking up too many resource's on the VPS? Anyway it probably makes a lot more sense to use the money you would spend on the VPS to buy litecoin at an exchange. You'd probably get more LTC at the moment.
A good VPS provider doesn't sell more CPU power than he has... In my country, at least, that's what VPS providers do (I saw offers in other countries where it wasn't the case at all indeed) - so a VPS is really just like a tiny dedicated server. No crappy random burstable RAM and CPU, you just get what you pay for.
As for the original question, yeah I think it's quite dormant. Steadily losing value and no recent news as far as I know. Also, hashrate has dropped quite a bit despite the release of a GPU miner.