"Most websites only consume a very small amount of bandwidth and disk space. Web hosting companies that provide unlimited anything as a plan feature are banking on the fact that you won't use very much." -http://www.findmyhosting.com/the-truth-about-unlimited-bandwidth/
Choosing a webhost is situational. There are many solutions out there that fufill different needs. That being said, if you're testing the waters with this project and on a budget, start with a shared host @10$/mo with due dilegence on which company you choose. If your site does takeoff you will want to switch to a beefier solution like one of rackspace's offerings.
Stay away from buying servers and hosting sites yourself. If your site gets popular the last thing you want is downtime. Also you will be constantly dedicating time to your infrastructure instead of improving and marketing your product.
As TomTom said above there are situations where physical servers are the only fiancially reasonable solution. If you end up needing that much "power", consider yourself lucky! You have succeeded in the game of life and can afford to hire sysadmins to do your bidding.