If you've shopped around, you've probably seen big bandwidth numbers such as "200 Terabytes" for $7/mo. How can they afford that? What is going on?
The best way to think of bandwidth of hosting companies is like computer processor speeds. Once you hit a certain number, it doesn't really matter anymore. The average commercial website takes up around 100 MB of space and uses less than a GB of bandwidth. Just like NetFlix offering 3 DVDs at-a-time for just $17, and hoping you leave them lying around a bit, big hosting companies offer whopping stats for little cash and hope that you don't use it.
What about people who do use all that bandwidth (or people who do watch and return 3 DVDs/week)?
NetFlix in the past has been known to use a technique called Throttling. This means that although a plan may say "Unlimited", there is an unmentioned cap on it. Netflix can force a user to a certain number of DVDs per month by simple not mailing the next DVD out for a few days.
The same works for hosting companies. Using a lot bandwidth, a hosting company can simply reject requests from users to view your page. This effectively caps your bandwidth. By keeping the "real" number secret, a hosting company can put whatever astronomical bandwidth number they want. Verizon once went as far to put "Unlimited" bandwidth, thus causing a major lawsuit when users assumed Unlimited actually meant Unlimited.
The big focus on bandwidth for hosting companies is an interesting one from the admin side because the most common reason (other than not paying) for an account to get suspended is using too much of the CPU. It's the hosting company equivalent of your CTRL+ALT+DELETE. Just like you force a program to close when Windows grinds to a halt, a hosting company may stop a CPU-intensive account that is cranking away on the server and slowing everybody else down.
Most places offer plenty of bandwidth for you to do what you need to do. Once you start hitting 20 GB of bandwidth a month, that's when you start becoming a CPU-intensive account, and the hosting company will start pushing you toward their dedicated options (which means you have the entire machine to yourself... you can grind away as much as you want).
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