If you decide to go with the university as your host, there may be some scripts that you would have to manually setup/install.
You can always get a domain to point to your site's URL if you don't like the long address, but check with your university computer help desk to check if this is allowed.
If you decide to go with another host, there are some pretty good FREE hosts out there
With advertisements:
Geocities:
http://www.geocities.com
Angelfire:
http://www.angelfire.com
Tripod:
http://www.tripod.com
Without ads (may have an alternative to ads):
Brinkster:
http://www.brinkster.com
Cool Free Pages:
http://www.coolfreepages.com
Net Firms:
http://www.netfirms.com
These hosts usually come with password protected directories already and some other features. These are also just a few of the more popular ones.
Hope this helps