Help with multiplayer server setup

Alright, my title is a little miss leading, but..hey, I'm a misleading Guy!

What I want to know is how to go about setting up servers for multiplayer games...Online.

My whole plan was to build something like BeGone (It's not FPS though) and to add a community behind it- get member's to start sharing assets and such - then the game will be are game, Not just mine (Player participation = player interests)

But I've stumbled into a little bump. How will I go about server Setup? not as In the user database and such- but as in where would the server be hosted? Does nplay, pay £150 a month for a massive hosting service? if it does, I'm screwed.

I was hoping to host the unity player for the game on my website, which will soon be hosted by 123-reg and then let the player's set them self as a server. the master server will then pick up the users servers and then it will try to "ship" other users to the IP of User servers? is this possible? I thought a server has to have a REALLY good processor?
If I could do this, Surely it will stop 123-reg from complaining?

And what is this business with Photon and SmartFox server? I believe these are the Jam in the sandwich - it directs the users to the server, but it's hosted on my machine? Hmm...

Anyway... it'll be good to have the fog lifted on this subject!