Virtual private server are between shared hosting and dedicated servers. VPS exists in the virtual space of a dedicated server, sharing resources with other virtual servers. Resources (CPU, RAM, disk space) are split up and managed by a software. Sometimes is better to buy a VPS rather than dedicated server. All benefits dedicated servers have also VPS have, except that VPS gives you less resources. So if you have a website that does not have ultra high traffic, or you provide a web service that does not use much processing you should go with VPS. It is much cheaper than dedicated server. However to properly manage VPS you will need to have advanced Linux or Windows administrative knowledge. Usually host provides, give you full root access to your VPS server. Full root access give you the ability to do almost anything inside your virtual machine. You can install specific software like ffmpeg or DNS software for domain name management, or anything you like. You can even configure it, and sell shared hosting, but if you up to for reselling you should probably get a reseller account first before you move t your own server. Some hosts even offer managed vps hosting, with which they manage many aspects of your account, including updating software, configuring webservers, configuring firewall and other. With unmenaged VPS you are left on your own, to update your software and configure it. Popular VPS hosts are HostGator, Dreamhost and IXWebHosting.