VPS or Dedicated Hosting?
 

In short we are running a community on vBulletin. The SQL database is currently a shade under 1GB but traffic is 80GB+ a month and growing. He are getting in excess of 1.3 Million hits a month. We sit on about 150 users online at any one time with a bust to about 400.

Being an Australian based forum we would like to stay locally hosted for latency reasons, but mulling over the estimated system requirements.

If I was to go VPS, what sort of speed/RAM should I be aiming for (allowing for growth of course)?

Alternatively, if I were to move to a dedicated service what sort of CPU, RAM, Disk etc should I be aiming for to support this little community??