The biggest thing to decide is: What are you going to do with your site? Are you hosting a blog? Are you selling stuff from it? Are you putting up a portfolio page? Or a landing page so you’re findable on the internet?
Be honest with yourself. Do you need three terabytes of bandwidth a month for your 100-word stories? I sure as hell don’t! My hosting needs are very different than someone like John Scalzi.
The simplest (and cheapest) thing to do is to create a simple “landing page”. Lifehacker has a good guide for doing that here.
Remember that you can move things around on the internet. If you’re just starting a blog, a hosted WordPress or Blogger or Tumblr account will do you just fine. It is possible to migrate from one to another (google-fu will result in how-to guides).
Hosting costs depend on what you’re looking for. How much bandwidth per month do you need? Do you need SSL support (which means a dedicated IP address)? (The answers are “depends on your visitors now”, “probably not yet”, and “probably not yet”.) Find a third-party review site that covers webhosts. Lifehacker covers webhosts, free webhosts, and name registrars. You will probably have to deal with compromises – I use namecheap.com for everything, but if you want super-easy-peasy setup, somewhere else might be worth paying a little more.
If you have the skills to modify and edit themes (or aren’t afraid to learn), I would not recommend laying out a whole ton of money if you can’t afford it. There are various types of free templates out there. Most of them suck. But some of them are pretty cool, especially if you can edit and tweak them. For example, I used zenlike from freecsstemplates for my website.
Be sure to check licenses! I had to pass up some good layouts because they were non-commercial (and I wanted to sell stories from my website) or did not allow alterations to the code, etc. Zenlike only required attribution.
If your sense of color and style sucks, get professional help. I have a hard time putting things together from scratch, but I’m great at combinations and modifying existing patterns and color schemes. If you’re not, pay the cash to look professional.
I guess lots of it boils down to “What are you wanting out of this?” If you’re just wanting to have your own domain and run a blog, then you only need to buy a domain name and keep a free hosted blog. (That should run you something like $3-$10 per year.) I switched to pro hosting when I decided that I wanted to sell stuff from my website and didn’t want to deal with uptime issues.
I guess I’m saying start cheap and flexible so that you can scale up – domain names can point somewhere else within 15 minutes – but if you’re in a 3 yr contract and find out you’ve bought far more than you need, you’re screwed.
If you have the money to spend on the theme and do not have the time/desire to learn the skills, then spend the money. Money is a substitute for learning how to do it yourself.
What’s your advice for hosting?