I have a few hosting questions.

I currently run a site where we get 10,000 unique a day downloading/ uploading high resolution photos. We use a decent amount of our 10MB connection. Now we are looking to expand resources and add a few services so we are trying to revamp the backend.

Currently there are 2 http servers (p4 2 ghz 2gb RAM) using software to load balance, 1 database server (p4 2 ghz 1gb RAM) , and a TB raid (Xeon 2 ghz 2gb RAM) for storage (right now its 1/2 full) Its seems fairly stable but won't handle any significant increase in traffic. This is costing us about 1500 per month.

1 question, does it seem the this is configured incorrectly meaning, that we should have enough resources?

2 How do the giant gorilla sites run their setup, should we be looking for virtual networking for servers?

3 what is the best way to handle the massive storage, how can the terabyte of photos be distributed across the replicated servers. What is the best method for uploading. (currently we have ftp into the raid and a complicated transfer method from form uploads, apache proxy serves up the images)

4 what should we expect to pay for monthly hosting

any help with these questions would be extremely helpful and greatly appreciated. Thanks