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If you are not sure what to get, start off with a virtual domain. they are normally less expensive than dedicated servers and easier to get setup. If you find that your domain is slow during peak times or you just want more control, freedom and flexibility, then you can move up to a dedicated server. There is no reason to start off paying the dedicated server price if all you are using is a few gigs a day.
Once you move up to a dedicated box, that is your box. You can do whatever you want with it. (of course, within the AUP). You can install whatever webserver, OS, special programs, etc that you want, as well as having however many domains you want. Most places give you root access
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