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I went the cheap manage it yourself route, then the semi managed route (which was actually worse because you are treated like a stepchild) and finally to a fully managed solution and have never been happier. I did learn a lot on those initial boxes, but I am glad I no longer need to worry about it. Running sites is much more lucrative than figuring how to fix the previous night's cPanel "upgrade".
I would say to get as powerful hardware as you can. Sure a celeron w/ 256meg of ram might do the job for you, but a P4 w/ 500meg isn't going to cost much more. Same with bandwidth - typically the cost from lets call it teir 1 to teir 2 is small... but go over your allowance on that teir 1 and it will cost you more than teir 2 would have. Trying to save money up front can actually cost more once them hun listings come around...
If you have no clue how to admin a box, and don't want to "waste" time learning how, you should definately get a managed solution. I would stay away from the "bargain" places that you will no doubt get bombarded with (a lot of these are merely resellers located in oversold data centers with inferior connectivity) and go with a real solution such as M3Server or any of the other real providers on this page.
If you have any more questions, feel free to hit me up on ICQ: 129435880.
cheers.
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