You can get some decent enterprise hardware for fairly cheap on places like amazon. I got a dell R710 for around $800 a couple of years back. The equipment tends to be a little scuffed up and older in terms of hardware, but they still offer plently of performance IMO. The one I have has a 6 drive RAID with 1.5TB disks, dual 6-core processors, and 128GB of ram. Only downside I would say is they tend to use quite a bit of power (around 207W from what I've measured).

I think it depends on the country. In the US, ISPs tend to be fairly strict so using a VPN is necessary (at least with Comcast). After 6-7 DMCAs, I've heard of people getting their accounts and service terminated. Best to use one and not take the chance with them. With 3rd world countries, most ISPs don't care about DMCAs so I can see there not being a need to use one in those situations.