A Shared server is pretty enough. But, just make sure you use a reliable host provider. That is very important for any website business.
I would say even a small VPS should suffice 1000 users and you will not need a dedi for that case. If you plan to move very big shortly, then its a different story.
Yes, look into reducing the actual resolutions of the photographs if possible. This can really help clean up the clog.