Hello, I have a question about hosting Minecraft servers from a home
server. I know how to host these servers, I know how to add
RAM and maintain them. Here's the problem, when I host a server with MONSTERS ENABLED, the server will lag horribly. The world will take
forever to load, and everyone who connects to the server have lag
issues. When I load the world without monsters the server runs
perfectly fine.

      One thing I have noticed is that when it's only me and one other player in the server, that other player doesn't notice much lag, and the game is very playable.
the more people who join, the worse it gets.  (Chunks fail to load, monsters will be able to hit you from 10 feet away)

I use a .bat file which opens the .jar server file.  I use it to allocate enough memory to have a healthy server.

java -Xmx1536M -Xms1024M -jar minecraft_server.jar

I'm assuming as soon as I turn on monsters the
server requires a much higher bandwidth, which is where all the lag is
coming from.

I host the server from the same computer I play on.
Specs:
AMD Phenom II x6 3.9Ghz
4gb Ripjaw 1600 RAM
AMD Radeon 6870
OCZ Vertex 60gb SSD

Internet is Verizon FiOS Tier 1
15Mbps download (1.8 MBps)
5Mbps upload (625KBps)
(It takes 8 MegaBITs to make 1 Mega BITE)

Only other Application I tend to be running would be Skype.

I run the Server on the SSD.

I have tried disabling my Kaspersky Anti-virus 2010 and then hosting.  No luck.

Now my question is:
To
host a server from my home network (to play with up to 8 other friends)
Will I be needing a faster upload rate? And what is the required
upload rate to host a server with monsters enabled?

Keep in mind, my actual upload rate  average is 625KBps