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I would guess you could get setup with a box to handle your domains for under $500-$600 a month. The question may be bandwidth.
1) No limit on disk space. I have over 2000 photos on one web site. My previous ISP's cost per megabyte was costing me significantly.
2) No limit on the domains. I host a variety of small domains for myself and friends.
3) Helps with the education curve. I have learned a whole lot by running my own server.
4) I have a lot more control. I can put software on the web site, database engines, etc. without having to appeal to some higher authority.
1) Cost is significant. For a 768K DSL static IP, no bandwidth limit, ~$165 U.S. a month. Requires a dedicated machine (mine is a dual pentium II/333, plus a pentium 200 firewall).
2) Requires a lot of knowledge about firewalls, security, administration, etc. This takes time and time is money.
Along with getting your own server, you have many other options. One would be to become a reseller for another hosting company. You can get rates upto US$ 4.5 for unique IP and 100-200mb space with mysql, php,2-5gb trasfer/month and other stuff. But well, this is just a suggestion. I am paying a guy in Italy US$ 35.00/month for 2.5GB webspce, 20GB transfer, 10 IP, ablity to add unlimited domains/sub-domains [offcourse they can't use space more than 2.5 GB] and also supports other stuff like, ssl, ssi, mysql,php.... well, I got a deal, as I knew him, but there are few companies out there, who are willing to provide you awsome rates.