If you are using Linux, the easiest (but not the best) thing to do is install Apache (and Mysql/PHP if you want dynamic) then install Webmin as this will give you a nice interface to everything.
If using Windows, Try downloading the Web Platform Installer which should get you installed with IIS, SQL Server, ASP.Net (and I think PHP) Very quickly.
Next step would be to go to your DNS records and set an A record for your domain that points to your IP, and a Cname that points to your domain.
Lastly, you want to forward port 80 on your router to the machine that has the webserver.
That should be it! If you do not understand any stage, please say in comments and I will be happy to help.
Thanks for the reply, Niek! I dont need the website to run 24/7. So dynamic IP should not be a problem. I would use DynDNS or Opendns for that. – Sarveshwar – 2010-01-03T18:44:38.380