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Well, it really depends on what you're going to use your server to.

If you're looking for a public server, with players I'd suggest a better computer then 2GB ram. Perhaps 4.

But if you're going to use your server for personal use and testing purposes, you can easily set it up on a 1-2GB ram computer. Tho, there might be some lag.
 
I'd rather use a Dedicated server then a Virtual Private Server.

There have been tons of questions like this, If you hit the search button or search your way around the help section and the normal flyff section you'll find good suggestions for dedicated servers and such.
 
Dedicated Server are alot better than VPS (Virtual Private Server). But you need a cheap one so the option that I can suggest for you is VPS.

Dedicated Server Price: $100 (minimum) : 101 - 1000 and so on (maximum, and those servers are for those professionals and famours/popular)
VPS Price: $15 (minimum, and i dont think if there is still a price like that) to $80 (and I think, this will handle a good starting for a server)

I can't give some links because other people's here are (bad and strict, they might give me a bad feedback) so try to look in "Google".
 
Lol. Like other posts, personal use, not public, Get a VPS. But for hosting an actual server, dont get a VPS, get a dedi. Dont listen to Jay B or anyone else saying VPS's, get a dedi. You'll have a better outcome.
 
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