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I love Magento. We have some installs on our dedicated hosting.com box and some installs on some cheap bluehost servers and they all run without issue. Unfortunately, I cant tell you the specs for the dedicated box, but I will ask one of my coworkers when I can get a hold of him. The one thing I can tell you is that if you use a cheaper solution, magento uses a shitload of tables to do whatever it needs to do, you can only have 2 magento shops on one bluehost plan. I don't know your situation, just throwing that out there. I think I tried 3 on one server for a client and it pretty much broke with some error about the tables etc.
One thing I would suggest you look into is how to speed up magento. There are many things you can do. I don't think it breaks the rules to link to magento's board but i don't know for sure. A google search for speeding up magento will take you where you need to go.
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