Why are you so up on password protecting? Just don't tell people about the files or don't advertise your site! I usually just through crap up on my webserver in a junk folder and send a link to whoever I want to have check it out. I'm not at all worried about somebody magically finding it and selling it to a boy band
At any rate, .htaccess is standard and not horribly difficult to setup. I'm not sure how phpwebhosting handles it exactly. Maybe it's in the web-based control panel that you'll use to configure your site, or you might have to use telnet/ssh or generate the file on your own machine (you need a way to generate a password hash at any rate).
What you'd do then, is create a folder (directory) called "music", for instance, and use .htaccess to secure it. If you wanted mulitple passwords for multiple projects, then it would probably be best to leave "music" folder public, and create secured subfolders off of it (e.g. music/project1 ; music/project2).
You then link to your music files from your main web page(s), which will be public.
Alternatively, you could put the page with your music links in the same secured folder as the music itself, that way a user would only have to authenticate once (although he might only have to authenticate once anyhow if IE caches the information).
phpwebhosting is a pretty good company. It is 10GB per month, and you can go over without extra charges as long as you're not breaking rules (acting as a file/warez server, porno, and so on). You can also go over 100MB if you really need the space, or so they claim. I had my wife set her work domain up with them because I've been sort of interested in their service for a while...so far it seems to be great.
Do not host your own webserver!!!!! It is simply much too dangerous on today's web. You won't secure it well enough and keep it patched, and you'll either become infected with some crap virus (especially if you use IIS) or you'll be hacked. Trust me, it's a pain, because I do it, and I've been hacked

Let somebody else take the responsibility from you, and just worry about distributing your tunage. Not to mention that even with a good broadband service your upload rates are always crippled. I'm lucky if my site can dish out over 256kbps, and I'm on a 768down/512up DSL line....that's just the way she goes.
Slackmaster 2000