For what he is looking to run, honestly, he needs dedicated. No one should be trying to use cloud, or shared environment on a project of that size. I understand about controlling costs, but it really is a very bad idea IMHO on a project of this scale. Virtual/Cloud/VPS are wonderful for some types of sites on a smaller scale. But with the amount of users, bandwidth, and scale O.P. is looking to do... I would not trust my business to anything other than dedicated.
If it should scale the way he wants it to, that is going to be a resource monster. So you do not want it effecting others on the same box. Cloud? I would not trust my money makers to a cloud environment, but again, I suppose it comes down to your own trust level. Many around WF rave about their cloud hosting. I have not seen one pushing anything on this scale, but for what they were doing. Sounded lovely.
If I went dedicated, I would make sure I had RAID as well for redundancy on a 2nd drive, daily back ups, and I would not start out with huge BW myself. I would start out with 25/100/250 to start... monitor it during growth... and adjust accordingly as I grew. Something like this, which could be a lot of traffic but text based, will be a lot different compared to many of today's content and video heavy sites. I would make sure I had some decent RAM as well.