Looking for a stable host that offers Magento-commerce software.
New Business
Located in United States.
Maybe 200 visitors a day?
60-70 Products max

Looking for a better price than $40 a month.
I imagine these specs are probably the most accurate to our needs:
http://www.inmotionhosting.com/vps_hosting.html

Can anyone else give me a proper analysis of our needs?
Is VPS necessary?

Is VPS necessary?

AFAIK no, shared hosting should do, but it's good to find a host that actually specializes in hosting Magento. I've heard that it can be heavy on the server.

I agree with Dan. Moreover Magento project has own web hosting forums where you will be able to get the suggestion regarding web hosting services

I have seen people hosting Magento on HostGator and HostMonster with just as many products and visitors per day without any issues.

I can personally recommend HelpingHandHost and SimpleHelix. But magento even runs okay on their personal site hosting which costs $5.60 month.

I second simplehelix as this company is optimized for running Magento on their servers.
And their semi-dedicated VPS hosting helps you much to meet your need, the OP.