1) I think you could charge in 24 hour increments pretty easily. Maybe the longer the server is running the cheaper it gets, so you could incentivize people to leave them up for longer periods of time.

For example (not real prices) maybe $5 per 24 hours and then $16 per week then $22 per month or whatever.

That way it's easy to take no risk at $5, but if you end up wanting to keep it up you're not paying $5 x 30 days which would suck.

2) I don't think you need to have the server end automatically. Letting me close it myself would be fine as an option, especially with the payment scheme I outlined above.

3) Let use prepayment. They fill up their account with $100 and when it runs out there's no overbilling. This adds a huge sense of security to the buyer. Probably also let people pay on-demand if they want by leaving a credit card on file.

4) Latency is soooo important. Offer servers in west/central/east coasts. Do not use shitty oversubscribed bandwidth providers!

If you do Urban Terror or BC2 I'll try it out for sure. Good luck!