Currently I am hosting a commercial website on a shared hosting environment. I am bringing it all in my basement hosting it myself.
Little background about myself:

I have never hosted a website myself.

On the other hand, I have Masters degree in computers, have developed few websites, installed the LAMP.

And I am concerned that I am not ready to host it inhouse.

Currently , I get 1000+ hits a day.
I bought a Server with RAID5 (3 disks).
Server is Intel® Xeon® X3430, 2.4 GHz, 8M Cache, Turbo with 4GB RAM. I already have ubuntu server 9.10 that I will install.
Comcast has better internet connection available where I live. They told me it is better than T1.

I will be using LAMP. Now my questions:
what kind of firewall I need ?
Do I need a switch ?
Do I have all that I need to host website in my
basement ?
What issues can arise that I am unware ?
I will like to add more servers as traffic increases. What I need to plan so that I can add these servers in near future.

Thanks a lot in advance.
I look forward to your suggestions.

You'll only need a switch when you have multiple servers. It sounds like you have the basics but as high as your traffic is and as uncertain as you sounds I'd recommend sandboxing the server, getting your site up and running on it and then gradually moving parts of the site over to it or testing it very thoroughly until you're sure that the new server is ready for the load.

Thanks OlyComputers,

Do you suggest any specific firewall ?

It really depends on what kind of site you're running and what operating system you're using.