What is VPS Hosting?
VPS hosting uses Virtual Private Servers contained within a larger dedicated server. The websites are hosted on the same physical machine but are contained within their own 'compartment' on the server. These 'compartments' can run totally independently of one another and can even have different software installed without affecting any of the other 'compartments'.
Who uses it?
VPS is used by customers who have outgrown shared web hosting and may have a lot of website traffic. Other reasons for requiring VPS (in a nutshell!) include the need for more space on their server, a wish to maintain full control over what is installed on the server and/or a need to run complex applications.