Bandwidth is the amount of data that your website can send to website visitors in one month. Bandwidth can be best described as gas/petrol for a car. If your website runs out of bandwidth nobody will be able to visit it. More than 95% of the websites do not need more than 500MB per month bandwidth.
You should plan for more bandwidth if you plan to use a lot of images, very high volume email accounts or audio/video on your website. Sites like mp3.com require an enormous amount of bandwidth, but for the average site - a low level will be enough in almost all cases
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scam alert report on hosting companies offering unlimited bandwidth