Going colo can be worth it when you need serious hardware but for 800$ / month you can pick up:
Four of these: Xeon 3210 - SATA 250 GB IDE/SATA HDD 2 GB 2000 GB 5 IPs $199.00
Or one of these ~Dual Xeon 2.8, 8 x 300 GB 10K RPM SCSI/SAS HDD 2 x 73 GB 10K RPM SCSI/SAS HDD 8 GB RAM 3000 GB Bandwidth 5 IPs $799.00
Which can take a lot of traffic. IMO Colo is great when you want to use lots of heavy duty HW and little bandwidth but for front end web servers you need a lot of traffic before it's reasonable.
Four of these: Xeon 3210 - SATA 250 GB IDE/SATA HDD 2 GB 2000 GB 5 IPs $199.00
Or one of these ~Dual Xeon 2.8, 8 x 300 GB 10K RPM SCSI/SAS HDD 2 x 73 GB 10K RPM SCSI/SAS HDD 8 GB RAM 3000 GB Bandwidth 5 IPs $799.00
Which can take a lot of traffic. IMO Colo is great when you want to use lots of heavy duty HW and little bandwidth but for front end web servers you need a lot of traffic before it's reasonable.