If I want to put my own website up on my own machine, what will i need for a connection (speed, transfer rates, ...) , firewall, software, etc..

The website would be created with VS2005 -- be ASP.NET 2.0 using a SQL database.

For the layman out there, I want a machine to sit in the corner with it's only purpose to be the web site machine.

You'll be running IIS as a web server. (Running Apache is a better idea, but running ASP.Net on Apache is very expensive - you have to buy a program that will interpret ASP.Net.)

Almost any broadband speed will be fast enough, unless you start getting high volumes - in which case you'll have to buy more bandwidth from your provider, or live with your users getting slow transfers.

Check with your provider first - some of them will close your account for running a server on a home connection, others don't care.

You'll need a domain name if you don't want to have to keep telling people your current IP. You can buy one (and the static IP address you'll need for it), or you can use a free dynamic domain name service like dydns.com or noip.com.

You'll need to forward a port in your router to the server. If you don't know how to do that, check the posts here on answers, or go to http://www.portforward.com/english/route... and look for your router, and then for HTTP. If your provider blocks port 80 (mine does) you'll have to use an alternate port, like 81 or 8080.