VPS stands for virtual private server. A virtual private server is just like a dedicated server except its actually being virtualized in a shared host environment.
That can sound a little confusing so lets be clear. Traditionally there are just a few types of hosting. A shared hosting environment is one where different customers share the same server. A dedicated server is when only 1 customer has control of a server dedicated to their own use.
A virtual private server is both at the same time. The customer has full control over their own system but the entire system is running virtually in a server shared by others. If you have ever used VMware or Virtual Box you have probably familiarized yourself a little with the idea of virtualization but for those who have not had this experience I will explain.
Virtualization is the process of running multiple operating systems on a single machine at the same time. In this way each operating system running from inside the hosts operating system functions just like an entire computer.
By this method. A customer can have access to most of the benefits of their own server but for significantly less cost and difficulty. This method can provide added security, an extended level of customization may be available and further control over your servers software.
In this scenario, because you are not sharing a single operating system there is no way for anyone to potentially access any of your files
With your own operating system at your disposal you have full access to your own applications. PHP, MySQL, etc. You can make changes to suit your own particular needs and necessities whenever you would like.
Overall, you would have a lot more control in this instance. For example rebooting your virtual server is simple and wont affect anybody else but you.
For more information check out ASPnix Virtual Cloud Hosting.