Hi Samuel,
I will advice you to go with Semi-Dedicated or a dedicated server rather then VPS for getting optimal performance and top quality streams. You will get atleast 1GB RAM with the server which is sufficient for playing multiple audio stream simultaneously without affecting server performance or audio quality.
Yes, you can upgrade your semi-dedicated server to a fully managed dedicated server at any point of time.
Installing SHOUTcast on Windows Server :
SHOUTcast can be easily installs like any modern Windows application you install on your server. you need to download Winamp and will have to download and install SHOUTcast Radio DSP plug-in for Winamp which is mandatory for running Shoutcast on Windows server. More detailed information is available at
www.shoutcast.com/download Under “ Instructions – Windows “ section