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/Peo, FreeWebSpace.net
We also had this issue when starting. We are a UK based company but our servers are located in the USA. Eventually we decided to price in $ because we do not expect to attract many customers from the UK due to our server location.
Like Dark said, if your target audience prefers to use pounds then use pounds (£) otherwise use USD ($). And if you're feeling really frisky then implement both either by using a script (for on the fly changes via drop-down, etc) or some text decoration.
We our not that fly yet to have a drop-down or tabs to pick where your from lol. Still working on our template we got from templatemonster so maybe at a later date as it dose sound like a good ider.
But £ and $ are our core market so i will change it to $ and see how that goes down with users.
it doesn't really matter i think. i have sold hosting for a while. most people are very savvy if they have been around for a while and with the digital age most people are capable of assessing the euro as approximately 1.5 of american . they are the same thing based on the currency exchange rate at that time.
to capture the few people that look at a currency as being strange and a reason not to purchase you can use simply use a payment gateway capable of conversion.
i support the drop down idea. you are really best putting your efforts into something more significant if you are new or don't have a devoted full time staff.
Which market do you target, the UK one or the international. You can list prices both in dollars and pounds but the currency exchange rates shall be updated every day.