[TYPO3] tell me about servers, and let me know what server I should purchase for my typo3 site

[dave typo]

I need to switch to a live server, (off of the in-house intranet test
URL it is currently on) and was wondering what type of server people
here recommend. The server guys here suggested getting a brand new
server for 4,025 USD, or 5000 CHF.

However, I don't want to spend that kind of money on a server without
knowing more about servers, and what typo3 requires. What kind of
money are we looking at here, and what kind of computer/processing
power I need?

Could I upgrade a PC with a 2.4 GHZ processor with more ram and a
larger harddrive, better fans, etc? and if so, what would this entail?
would it be worth it? Also, what do you guys use for a server?

thanks for your time,

-Dave