Our company is seriously considering going with an in house web server. We are currently running of a T1 that is used by about 10 users. I an trying figure out if that is going to be enough bandwidth to cover the current load and the load that would be needed for a web server.
We have a client that is using a T1 for about a dozen employees, and is serving two websites doing about 2,000 uniques (each) per day.
At that relatively small level of traffic, they have not had any problems. I don't do any of the system administration on the server side, but I recall them saying that it is setup to prioritize the web pages, and minimize allocation internally when there is a spike in traffic.
If you are serving up several thousand pages an hour, I would say it's time to find a bigger pipe.