Right then... still haven't had a reply from me mate who I was hoping might give me some info on this (I'll have to give him a ring sometime). However, I've been extremely bored at work this afternoon and found a few sites you might want to take a look at:
www.prs.co.uk - Performing Rights Society
Looks like you have to pay a licence fee to them in order to broadcast on the net, there are details on the site.
www.ppluk.com - Phonographic Performance Limited
Same goes for these, I'm afraid. Bit of a crap site though, it tells you that it's necessary to pay them to broadcast music on the net but then I couldn't actually find anything specific relating to the costs (you may have more luck than me though)
I reckon these are the main two culprits although there's also
www.mcps.co.uk - though I think this is only applicable for when you're using other people's music for your own production (ie using music as a backing track on an advert or sampling other people's music in your own records)
As for whether you could use a server in another country to avoid these charges, I did find something on the PRS site that stated their licensing applies to any outfit based in the UK whether the server is hosted here or not
Hope this is of some use, if I manage to find out any more info I'll let you know
Cheers
Mike