Sounds like good stuff for the 'finding and selecting a web host' page!
Marc- could you post the comments on the Web Host comment page?
As far as hosts like GoDaddy, you will most likely run into problems. We initially started running Moodle on one of our existing hosts (Fatcow) and experienced all but one of the issues Don mentions (storage had not YET become a problem). We were constantly running out of memory and before it was over, our database
had become a tangled mess, forcing us into a perpetual maintence mode. And we only had about 50 students at that point, and only 8-10 users max were online at a time!
Now, we still use fatcow for email accounts and a Moodle sandbox (can't beat the price!), but we only have one or two users (being admin) tinkering around the test site at any given time (no real new user data, chat, assignment submissions, ect. - the normal moodle stuff), so the demand is practicly nill.