We'd need more to go off to make recommendations - a dedicated server may be overkill.
How big will this image library be (in GB)? And will this image library just be for storage, or will it be browsed regularly by lots of website visitors. Will you need to do GD-type processing on the images, or just upload, store and download them?
How busy will the website site be - how many pageloads per day, or similar?
We're not setting up a new Flikr - thankfully for me!
Basically, we're a producer of products and we need dealers to have easy access to our hi-res pictures and hi-def videos for download and distribution on their marketing channels.
I can't give you a definitive amount of images and videos per products but to give you an idea.... There are currently 200 products and this number is due to increase rapidly over the coming months. We would more than likely create 10-15 pictures and 1 or 2 videos per product. Over-compensating, I would say I could need max 600mb of space per product, multiply by say a potential of 2000 products that's a total of 1.1gb of space needed.
Now, I know that that's massively over compensating but I reckon that this is better than getting too little and having to upgrade in future.
In terms of visitors, we're estimating between 5-10k unique visitors a month to start - expanding as the brand grows.
So, yeah, my gut feeling is saying a dedicated server but I'd love to know people's opinions, recommendations and experiences with similar projects.
Oops. Misread your post. Then 1.2 TB is your likely use, not the 1.1 GB you estimated above, and not the 120 GB I just estimated.
At that point, you are definitely looking at a dedicated server, and it won't be a cheap one. That needs something like 4 x 1 TB drives in RAID 10. The other solution is to find a way to offload the large files to storage elsewhere (something like AWS), and then you could run the site on a shared host with just 1-2 GB. Although the traffic figures you gave suggest that you may need a beefy VPS for the site itself.