Well, it 'could' be done, and yes you can use IIS with MySQL and PHP, but we all know about IIS's notorious security flaws

. Apache is available for Windows and runs fine under NT. Obviously the best choice for that laptop would be Linux, though.
16kbps is gonna be slow if two or three people use it at the same time, but if you keep the forums pretty clean and free of excess images and other 'eye candy', it'd work.
For such little upload bandwidth, vBulletin is gonna be slow regardless, though...
For me, 10-15 bucks a month is a small price to pay for a decent web host. I use
http://www.extremepresence.com , and haven't had any problems at all.