You could check this out for server space: http://aws.amazon.com/free/
Otherwise if you buy a domian (£20 a year) you could use that.
You can query the market for purchases, however it's only recommended you do this on fresh installs. You would do this by using SharedPreferences to store who has purchased what, with a check when your app starts for if the sharedpreference exists, if it doesn't (new install) then query the market. - Not the securest method but a good option for you.