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What it comes down to really is capacity planning. What sort of usage patterns are you expecting, how many simultaneous users, how large is each page, how long will they spend on each page, do you have large downloadable files, how much bandwidth are you likely to chew up, etc.
Anyway we never use anywhere near that. We have several hundred sites on this server and a good few that are very popular...
DSL does not come with a service guarantee (at least, not as far as I've seen). It can, or more likely WILL have uptime problems, which means your server will drop off of the internet for a while. Is this a problem? If so, consider hosting elsewhere or at least have a backup solution in place!
As for upload speed, 768k should be fine for a light-to-moderate loaded server hosting only web pages, text, and a moderate amount of images (this includes dynamic content). I'd make sure the webserver supports compression as this will increase the serving capacity over the line.
You'll probably find serving video or any similar bandwidth-consuming tasks involving more than 2 users a no no.