I plan on storing the userid, username and location in session variables for each user who logs in. That's 3 variables per user. If 1000 users were logged in, would this be too much for the server to handle. Would this cause problems for the server and get me kicked out? I'll be using godaddy's hosting for this.
The amount of sessions you are talking about maybe isn't the big deal, but the most important question is what are these sessions (users) doing when they are logged in, how much load every one is causing?
Some times, a one logged user equals to 10 other, in the amount of load he's causing on a server, taking in consideration what are the processes he passing through within his session.
If you are (and you seem so) running on a shared hosting server, it might be good to consider the amount of load (processing, quires..etc) your script is issuing and generating.
Play it wisely, minimize your quires to the lowest possible, inquire your host if they have memcached enabled and consider using it, give special attention to your code logically and technically.
In the other hand, you might make use of a VPS hosting, if you require some specific dedication in server resources.
No, i think not :) Why would it be?
1000 is a pretty low number, so you shouldn't be concerned.
Perhaps you could use memcache its more effizient. Its possible to configure your apache that he store automaticly the session in memcache.
1000 sessions it not so much.
Most of the servers these days are pretty high end machines which compute humongous amounts of data. Your 3 variables use a very small amount of memory. So even if all your 1000 users log on and perform activity simultaneously, I doubt if it would affect the server too much.