<p>We have a dedicated godaddy server and it seemed to grind to a halt when we had users downloading only 3MB every 2 seconds (this was over about 20 http requests).</p>

<p>I want to look into database locking etc. to see if that is a problem - but first I'm curious as to what a dedicated server ought to be able to serve.</p>

A lot depends on what the 3MB is.  Serving up 1.5MBps of static data is way, way, way, within the bounds of even the weakest server.