- High Scalability

This question is for all the gurus here. Please help this novice
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I am starting a video sharing site like YouTube in India. I want to offer the best quality possible, at minimum cost. Nothing new about it, right? :).

I have done some research on the dedicated hosting services and CDN services available and I have some basic knowledge on these.

Following are my requirements

1) My budget is $500 to $1000 per month for hosting (including CDN if and as applicable).
2) I will need around 500GB of storage and 1TB per month of bandwidth in first 2-3 months and then about 10TB of storage and 5TB per month of bandwidth. And more ... depending on how big it gets (I can afford more when it gets big)
3) 90% of my viewers are in India. Other 10% are in US and UK.

Based on the above, could you please answer my following questions?

1) Can I go with just a good dedicated server to start with and get a CDN service later on when the site gets big? Or do you think its wise to start with a CDN service?
2) Should I look for a server closer to India? They are pretty expensive in Asia? Should I look for one in Western Europe or at least Western US? How big a difference does it make?
3) Could you suggest the best dedicated hosting and CDN service based on my requirements?
4) I can get unmetered bandwidth on a 100Mbps pipe for my budget. Do you think that will be fine to start with?
5) Anything else I am missing?

Also, could you also please give any tips on how to minimize the bandwidth (buffering, lower bitrate etc..)?

Thanks a lot for your suggestions!