VPS stands for virtual private server. It is also referred to as a virtual server or a virtual dedicated server. It takes one big server and partitions it off into several smaller servers. Each VPS hosting account can have its own operating system and can be rebooted without effecting the other accounts on the same machine.You get all of the benefits of having your own dedicated machine, but you still have some limitations.

With a dedicated machine, your RAM and CPU usage would be a little less limited, with VPS hosting you are up to with other accounts. You will be limited by your Web host in disk space, bandwidth, CPU and RAM usage. Now where a VPS is helpful is when you need the benefits of dedicated hosting such as certain types of script setups and account access.