Hey,
correct me if i'm wrong, but you want to host your own server at home? In your room??? Your parents will get a high power invoice

The following may sound a bit harsh, but it's your future.
My thoughts as an IT guy:
- What about keeping the machine cool? It's running all the time. Maybe AC is needed. Costs for AC and energy?
- Backup? How are you gonna backup the clients and your data?
- Security - Are you sure you can protect your clients and your data?
- Administration - Can you administrate the server yourself? What if updates have to be installed? Maintenance?
- Loss of internet connection, DDOS? Backup-Line...?
- Poweroutage? - UPS
- Firewall - You will need a good one. As soon as you open port 80 you will get attacked. That's for sure.
- Static IP!
Everything costs money, do a calculation. You need to do what you gotta pay, before you decide your price.
How much W a server consumes depends on the machine.
Hardware:
What made you choose that hardware? Thats a personal computer. Only 1 HDD? You gonna need a raid! If that hdd is broken you're fucked.
You don't need a graphic card for a webserver. An internal one is enough.
I can't say anything about FreeDOS.
Your targeted customers:
The city has 200k people? That ain't your customers. Companies are.
How many companies are there in your city? Most of them will already have a website. Why should they invest money and switch to your space?
More customers -> more hardware -> less costs for hardware -> cheaper prices ->more customers... -> Profit
Price:
You won't be able to beat the prices of the others. What makes you the better company?
Edit: How are you planning to handle the domains?
My advice:
Most of the bigger companies offer a reseller package. Start with that. Less profit, but less stress.
Maybe you hook up with someone that offers webdesign and offer a complete package. Let the company pay for space + website each month!
:beach2: