I am not sure of what to do.

I am planning to set up a site that will be hosted by an ISP, new members will join through this site but I want to keep the details of the members as safe as possible and we cannot afford an expensive set up at the beginning.

I thought there was 2 options:
1) have a separate account with an ISP to store the details of the members and the CGI routines required to process them
2) hold those details and CGI routines on a home machine to which "forms" would be submitted

In option 1, I wonder if I would have difficulties with the ISP if the routines involve (in their eyes) too much processing (these routines are written in pure assembly and are doing only basic validation, the testing shows that executing them in a loop of 65535 times takes only milliseconds on my AMD 1600MHz machine).
I also wonder how safe the data would be compared to solution 2.

In solution 2, the machine is powered by deep cycle, solar charged batteries and behind a "Smoothwall" firewall.

In solution 2, assuming the hardware set up is correct, there is only the risk of unpredictable damage through a badly set up firewall.

Having no experience in managing a site, I am hoping someone can provide practical hints and tips that would help me choose the least risky option.

For example, I have an account with ICDSoft ($60 per year) and I have had no problem whatsoever although I only use it as a remote backup of my main machine. I may have yet to discover their behavior when I start processing CGI routines on their $100 per year business plan.

Thank you for your help.

What's the data you're storing worth to others?

As it is encrypted data related to the membership of a political organization, it could only be worth something to corrupt politicians (nearly all of them) who feel threatened.

Thank you for your answer.

Cheap hosting means shared hosting, right? Encryption/decryption means there'll be data and/or residue in memory. If you're concerned about (advanced methods of) snooping you wouldn't want it to be on a shared host where somebody has a *chance* of accessing it due to lack of process separation, misconfiguration, glitch or root rights. If that's not the case, then how does the encryption/decryption take place and what measures can you take to make the window of opportunity small(er)?

Thank you for leading me through the logical steps for making a decision.

You are correct, it is shared hosting.

I should have specified the data would only be encrypted if I keep it on my local machine (encrypted raid disks). The hosting I got does not include encryption.

I can already see that the shared hosting involved may be more unsafe than storing the data on my local machine.