As mentioned on an adjacent thread, suggest you have a look at
http://www.freenetname.co.uk/who will give you a connection and host a domain name for around £18 per month (5 gb per month allowance). They currently give me a 2 mb service and have said this will be upgraded to whatever my line can take up to 8 mb in the near future.
If you don't want to use them as your ISP their 'Justmail' service will do want you want for £20 pa - I use this for my company e-mails, it was easy to set up and looks professional. Their customer service seems OK, not that I've had any problems, they seem to be small enough to make a reasonably rapid, personalised response to any queries