My prior experience with servers has generally been limited to home file-sharing servers, low-traffic web-servers, and the like. This leaves me with the technical knowledge of how to set up a system, but little experience in terms of scaling said system.

My current project, however, has me as the technical lead in setting up a school for online audio and video streaming. The difficulty I'm running into is that I don't quite have the experience to guess what they'll need, and they don't have the experience to tell me - so I've tried to ask as many pertinent questions about what they want to do with their server, and here's what I found out:

• About 1000 simultaneous users, and hoping to expand (possibly significantly)
• Both video and audio streaming, at obviously the highest quality possible
• Support for both live and playlist-based streaming.
• Probably only one channel, but as it's an educational opportunity, I imagine letting them have a few more wouldn't hurt.
• No word on whether they're locked into Windows or whether Linux is acceptable.
• Approximate budget - $7000. It may actually be about $2k less than this, because of a mishap with another technology firm (they ordered a $7000 DV tape deck for some reason, and now the company wants them to pay a 30% restocking fee).

The tentative decisions I've already made:

• I'm planning on using Icecast 2 for my streaming server, fed by VLC Shoutcast encoding.
• Since the school already has a DMZ set up, I plan on placing the Icecast server in there, and feeding it through their intranet from a simple workstation computer in their studios.
• This system isn't in any way mission critical - it's an education tool (they're a media magnet school), so I figure redundancy is not worthwhile to them from a cost:benefit perspective.

What I don't know is this:

• How powerful of a server will I need?
• What is likely to be my major throttle - bandwidth? How can I mitigate that?
• Will I need anything special for the encoding workstation other than professional video and audio capture cards and a copy of VLC?
• Are there any other considerations that I'm simply missing?

Thanks a lot for any help - if there's more information you need, let me know and I'll tell you all I can.