What should I buy? This question gets asked daily on many of the forums I frequent and I am going to tell you my recommendation based off your level of experience and needs.
If your just starting out and have no experience with Linux or with WHM I would strongly suggest you start out with a decent reseller plan from a reputable provider. This keeps your cost low and gives you a knowledgeable support team to help you if you get stuck and the servers should be secured and optimized so you will probably see better overall performance. But it also limits what you can do from an administrative perspective since you will not have root access.
Now if you have a basic knowledge of Linux and understand how to run programs and scripts from command line, or have out grown a reseller or require more control (root access) then maybe a VPS is more for you. If you have outgrown the reseller and need a VPS but still not sure how to use Linux then I would suggest a fully managed VPS or hire a server management company to assist you like rack911.com. Steven and Patrick at Rack911 are very active in the web hosting security community and typically are very quick to warn and offer up suggestions to the community to help keep you from getting exploited. I highly suggest checking them out.
If you decided to go the VPS route keep in mind that WHM\cPanel requires a minimum of 1GB of dedicated memory to function properly so choose a VPS with at least that amount of memory. WHM VPS license will also typically be an extra cost unless the provider has a package deal and the average cost will be between $10 – $15 per month depending on their cost. You can also purchase a license from an external license provider such as BuycPanel.com or LicensePal.com.
And then the last option is a dedicated server. With a dedicated server I suggest you to be pretty knowledgeable with Linux command line or hire a management company to assist you. The dedicated server is going to be the most expensive option of the three but give you the most speed and control over your hosting environment. Typically dedicated servers are going to start at around $50 /month for a little bit older server (Ex. Intel L5420, L5520) and newer generation servers (Ex. Intel E3-1230, E5-Series) can be had for $99 and up depending on configuration (memory, HD, connectivity). Also WHM license is also going to be more expensive for a dedicated server, typically $29 to $32 per month so be prepared for the cost involved.
If your going to go the dedicated server route I also recommend getting at least two drives so that you can create a RAID1 mirrored array so that if one drive fails then the server will continue to operate and you will not suffer from data loss. You can then have the drive replaced and reestablish the mirror so that both drives have the same information. We will go into more detail about RAID in another post and give you a rundown of the advantages and disadvantages of each type of RAID.