Whats the difference between Linux and windows hosting? Do i need Linux on my system to linux host?

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Linux hosting runs linux on the servers. Windows hosting runs Windows on the servers. You dont need Linux on your system to use a linux host. As other people have stated, you only need to worry if you are using something that is ONLY linux/Windows specific. Flash can be served from both. The one thing to bear in mind, is if you are administering the server yourself, it might make sense to actually understand the server OS you are using. Eg. If you use a linux host, but are completely lost when it comes to administering it, then thats not very helpful. I would say go with Linux hosting if you can, since its more secure and is the best IMHO.

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the server's OS has nothing to do with your OS. You can use a linux server if you're running windows. Many web hosts will offer things like PHP and mySQL on a linux server, and will run ASP.NET on a windows server, so just pick the one which you use. Other's, like godaddy, has PHP and mysql also on the windows server. Linux can be faster in some situations, but I wouldn't worry about that if you're getting less than 1,000,000 hits per day. It is cheaper because Linux is open-source (Free), and windows is not.

As long as you do not plan to use ASP or ASP.Net, you wouldn't need to be worry about any thing. You wouldn't even need to have a Linux system at home or locally to have a Linux hosting. What you need is some little information about the nature and directory structure of Linux servers. Most web tools of Linux hosting have a free to download Windows version with equal functionality (Apache server, MySQL, PHP, ... all are available for local design on Windows).

The different between Linux and Windows hosting is the operating system running on the web servers. Unless your website has some Windows or Linux specific server-side scripting code (PHP, Perl, Python, Java, ASP, SSI etc.), you shouldn't have to worry about it (you rarely have to at all), although Linux and Windows both have their advantages and disadvantages. So the answer is that no, you don't need to worry; a website will in almost all cases run just as fine on a Linux server as on a Windows server.