It depends on your packages. If you phpNuke its not the same that if you offer only static html pages
For your needs, it seems that an old PIII-800 with 256M of RAM will be enough at large. You can even try a duron 900 and 128M of RAM if your customers will not use too much memory. I'm aware of this kind of server for 79$ monthly and 0 setup with a lot of bandwith (300GB) with one of my host. pm if you're interested.
umm ... yeah ... from my experience... i'd say load up on the ram (also because thats extremely cheap nowadays).. don't worry too much on CPU power... because i've got servers handling over 100,000 unique visitors/day on PHP/MySQL intensive sites and even they don't do much cpu usage... on single 1ghz processors... its just the ram that loves being eaten up... (and the mysql is hosted on a separate dedicated box too)
most of the sites will be using scripts. about 10 of them will be using mysql and php heavily. i was thinking about a p3 1.4ghz with 512cache and 1gb if ram. then down the road ad another proc. what do you think?