Any less would be a pretty low end server, with minimal hardware. If you just want a server to host one or two sites, that might be good enough to get you by. But if you’re hosting 500GB worth of data… Chances are you’ll be getting a lot of visitors… So a cheap Celeron with 256MB of RAM won’t do you any good no matter what size hard drive is in the machine. If 5,000 people are hammering the site at the same time, the RAM and CPU speed is going to determine whether your server can handle it.
But I would go with a big name such as Serverbeach.com or Rackspace.com. These two aren’t necessarily cheap, but they have great service.
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