This one is really tricky. A very simple Web site with only a handful of pages, containing a small amount of images is probably going to take up less than 1 mb of space. That's it... pretty small compared to almost any program that you have installed on your personal computer, right?
But wait, there's a catch... (there's always a catch)
The visitors to your site are all recorded in the site's "log files". These files start off very small, but if your site is extremely busy, all of those log entries begin to add up. If the log files are kept inside your site, and are counted against the size of your Web site, you could find that you quickly run out of space.
I know somebody who has a very neat, well organized site - the actual pages don't take up very much space on the Web server - but it is an exceptionally busy site and one day things started to go wrong with the site, and he found out that he had exceeded the alotted space for his site. This didn't seem possible, but after some investigation, he discovered that the log files were over 50mb in size. Ooops. Time to get more space, and trim those logs.
Back to the size of your site...
Every file that you add to your site obviously adds to the total usage of your Web 'space'. For most normal (.html) files, this isn't going to be an issue. However, images, video, sound files, and database files tend to be very large. If you have 5 images of 20kb on every one of your 20 pages, that's an additional 2mb just in images. But those are still pretty small. If you decide to throw up some video or mp3 files... your space is going to disappear pretty quickly. If you're running an e-commerce site that maintains a database, you could also be dealing with some space gobbling files.
The answer to the original question of "How much space do I need?" is this:
What are you planning to put up on your site? 25 or 50mb is usually more than enough for a personal or small business site, but the space that you need is really going to depend on what you plan to have on your site.