Money required greatly varies depending on which route you are going. Are you looking to purchase a dedicated server and hosting your own servers? Are you looking to purchase a game server and host it through a company and have players join that way?
Depending on which game you are looking to host as well, the prices will vary per slot (hosting with a game server provider) or per box (dedicated) and range from as low as $1 to $500, maybe even $1,000 (i haven't seen these yet

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What are game servers used for? Allows players around the world to connect to your server and game with each other. I am only relatively familiar with FPS servers and such people can frag with or against each other depending on the game. I am sure there are many more out there for many games which would involve different methods.
Configuration varies as well generally depending on which game you are using. Some games have a panel within allowing easy set-up. There is many routes to go and as such many documents are online to assist as well.