Personal opinion about the ISP: I'd write them back to ask them where in their agreements it states what "excessive bandwidth" is, and whether there's an actual bandwidth limit for your type of account. They may argue you're not allowed to run a "server", but that's not the sole function of your Gnutella client, it's part of its whole operation. it is just like MS Messenger, AOL IM or ICQ also have functions that require incoming connections as part of it all.

Nevertheless, more on the topic itself, yes, because of how Gnutella constantly communicates with other Gnutella clients, it does take a fair bit of bandwidth, especially with more connections and shared files. If is a burden to you, which it appears to be, I'd recommend using a Gnutella client that uses "Ultrapeers" (currently, LimeWire and Swapper). When your client functions a leaf, a more capable Gnutella client will handle most of the load for you.

Certainly wouldn't like to see you "disappear from the scene". Good luck though!