I have used Dreamhost, Bluehost, Host Monster, and Host Gator in the past with no problems! I have designed all my previous websites by myself (I suck) so I can't speak to designing services.
The problem with Godaddy is if you email market to your clients they can report you to Godaddy & they will fuck you for $199 fee for spam or they will hold your domain hostage for $75.
Talk to John. When I was in buisness he took care of everything for a small set up fee and a small monthly fee. Service is top notch and you dont have to worry about anything.
I use godaddy and hate them as well. Ill be keepin an eye on this thread.
As far a design goes. I do a ton of business on Elance. I get full websites (5+ pages) with shopping cart features, banners and online Admin/editing panels for $500, original logos for $50 and literature for less than $100. It a wonderful place for the consumer. Looks like it would blow for all the providers. You got guys literally all over the world competing for your $100