There's no limit on bandwidth. Just don't load up on hundreds of GB of space.
You're limited to 25 simultaneous CPU cycles (meaning if 26 people visit your website SIMULTANEOUSLY, your website will go offline; this is very unlikely unless you get on the front page of Digg or something).
Get SearchStatus.. not only does it have Alexa, Pagerank, Compete, and MozRank checkeres all built into a compact little bar, it also has the option to highlight all nofollow links in a light red box ;)
He wasn't being a retard, it's true. Pagerank is in realtime, the update you saw was just what was made visible. Any changes in traffic is coincidental.
Either you didn't do a good job on linking to your homepage on every page of your site (interlinking) or your homepage was penalized by Google. I had the same problem about a year ago with one of my sites, and interlinking all of my pages fixed the problem.
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