Lucky for you, Amazon EC2 announced their "extra large" instances just recently with 1.7TB of storage. EC2 and a TB of data on S3 may be a pain to set up, but

Lucky for you, Amazon EC2 announced their "extra large" instances just recently with 1.7TB of storage. EC2 and a TB of data on S3 may be a pain to set up, but it has so many advantages that it's a huge win. I would at least take that as the presumptive choice which other options are weighed against. I know a lot of people will line up to beat the drum for Amazon Web Services but it really is one of the most fantastic resources for startups since Linux.