Webserver - What to know A2Z

I recently registered a domain. Planning to build my own webserver to host pages for the domain.

Questions?
1. I have download apache 2.0 from the web and have installed it for free on my PC? Is there anything else i should be considering before proceeding into further details.
2. At the time when i have installed the webserver it did ask me for domain information (mydomain.com) and the server information (www.mydomain.com) and the domain contact email id. My dilemma is how would i tell the domain that my webserver is on my PC and pull the webpages from its root.
3. Its very expensive for me to spend money over the web-hosters for 50MB and 1GB for memory, when my machine has 80GB and 512 capacity and under-utilized. Any advise?

Any help to start and get my webserver going will be greatly appreciated. I am not a web geek and looking for precious advice.
- Atul M