:) Hi DarkLour,
Lets start with the " 7.95 for 20gigs bandwidth and 250megs" the way that a hosting company does this is to oversell, by that I mean they hope that the client that purchases that package won't use anywhere near the allowance they are given, so therefore if a company that does this has 200 clients on the same server on that package and they all use their allowance then they are in trouble and also support with companies that charge these ridiculously low prices is sub standard in most cases, oh you will have the ones that tell you that they have a backup contingency for just such cases and therefore there wont be any problems but just look around some of the hundreds of web hosting forums and see how many disaster stories there are about these type of hosting companies.
While most hosting companies oversell to a certain degree the above scenario is excessive overselling.
Now for the "4gigs space, 25gigs transfer for 75.00" this is obviously a reseller package, thus the high amount of disk space and while it is a little on the pricey side the reason for this is that as a reseller, the client is more likely to use their allowance, so knowing this the hosting company is charging accordingly to cover their costs and make a profit, (in this case a large profit).
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but the transfer is not so good. so how is it someone can actually buy that and make any kind of profit. cutting it up. do people really buy hosting with 2 gigs of transefer? and if so what do they pay? whats a "average" that people pay to get what space/bandwidth?
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Yes people buy shared hosting with even less than 2 gigs of transfer and they pay prices from as little as $2 a month right up to $20-$30 a month it depends on the market you are targeting. In most cases the average is around $6-$7 a month for 150mbs disk space and 2 gigs of transfer, however this will probably raise a lot of debate, so it will give you an idea of how varied the pricing structure is for shared hosting. Just a bit of advise if you become a reseller don't get caught up in the crazy low priced hosting out there as you will never make a decent profit and get a bad reputation as well, while this is over simplified by basically giving your customers decent prices and good support and you will build yourself a good reputation and succeed in your business venture.
Hope this helps you to understand the strange world we call reseller hosting.