You don't need a separate server, just an FTP server service running. I have used the software from link in the past (long distant past) and it is free for private non-commercial use. I am sure that there are other free FTP server programs out there, but at least this will give you a start.
Most free hosting providers (Geocities, Tripod etc.) have a policy against uploading mp3-files. They also have size/traffic limitations, so the free hosting is not really an option. Paid hosting providers also have some sort of limitation on that. Your best bet would be to host the FTP server on your home computer, but you would need a very good machine and high-speed Internet access. Of course, you'll have to pay for all outgoing traffic etc. etc...
Running a home server can be done for free using the software that is built into Windows XP Professional. However, you do need to use a PC that is on all of the time and it will suck your Internet Connection - especially if there is more than one person downloading. This might not be a problem though if you are seeding mega amounts of torrents.