If you are in the US at least, your contract you entered into with your ISP probably forbids you from running a home server.
Now dollars. Figure out how many watts your server uses. This is not the wattage of the power supply or the amperage on the power connector times 110. I measure mine with a Kill-a-watt. For a desktop PC of unassuming power it is probably something like 90 to 150 watts. As a quick rule of thumb, you are paying $1/year for each of those watts.
You would have to have a 60 watt PC to compete with Hostgator on dollars. The only PC I have ever had that falls under that is an Atom based machine.
;)
Although I have LAMP and make my things locally I prefer to "outsource" my hosting to someone else.
Then you stick it under your desk, and it purrs along forever.
Then you stick it under your desk, and it purrs along forever.
It's much faster to edit a file locally as opposed to over a network share (sshfs).
http://en.wikipedia.org/wiki/Opportunity_cost
I, for one, remain fully satisfied with the time I spent installing Gentoo Linux.
Running a server at home is great if you actually want to learn the ins and outs of administrating. I've always felt like there are three ways to administrate a server:
1) Just make it work. All sorts of problems lurking under the surface but it does basically what you need it to do until you find out one day something is broken and you have absolutely no clue how to fix it so you have an emergency Google session trying to figure out what a cryptic error message means.
2) Make it work well and follow some basic 'best practices' This is only as good as the HOWTO you're following. Definitely better than #1 but a much bigger hassle. Not as much of a hassle as..
3) Do it right. Learn the platform inside out. Fine tune everything. Develop rigid backup & maintenance policies. Keep current with security issues. Check your logs religiously. Maximize your uptime.
These are all perfectly valid approaches to it depending how important the server is but they all do include an element of hassle and upkeep versus paying someone a few bucks a month to do it for you.
I've heard this a lot, but never encountered it and I've run servers off of DSL, Cable, hell, even off a Sprint Wireless Card...
EDIT: I've always been a relatively good boy with these servers, so that might explain it.
I recently put together a new machine - an MSI Wind (the cheap one, $160) + 2gb ram ($20) + a OCZ Vertex 32gb SSD ($100). It's quite nice, fast, silent, and consumes 25 watts at idle.