Maximum Database Size

Possibly a stupid question, think I know the answer but just to make sure.

Im working on a php/mysql application that has a database size of around 2GB, the number of queries will be low only several hundred a day. Will this need to go on a VPS or can it go on a shared server, and will a large database effect server performance even with SQL?

MySQL doesnt seems to be the best choice for this big a DB, but highly depends on your application needs (like the level on concurrency and transcational nature).
This sure needs a good VPS at the least.

The only operations that I will be using will be INSERT, and SELECT with GROUPING queries (absolutly no unions, intersects etc), the attributes that I will be selecting will be indexed (and indexing the index if needs be 8o ) wouldnt the indexing drastically reduce the processer usage for the queries?

When I merge all the test data ill try it on my VPS, see how intensive it is

The application itself is another web based interface (but with more datamining and statistical analysis) for the 500k AOL search queries that were released and then retracted. Similar to this http://data.aolsearchlogs.com/search/index.cgi