VPS is short for Virtual Private Server. VPS Accounts are
the "middle ground" between shared hosting accounts,
and full-blown dedicated servers. With a shared server, all
of server's resources (like memory, processing time, etc)
are shared with every web site that lives on that server.
If one of those sites decides that it's going to take up a
lot of memory, or eat up a lot of processing time, your site
could be slow to respond to users, suffer random down times,
and a host of other "bad things".
With VPS Accounts, a server is sliced up into accounts where
each account has resources that are dedicated to it. Every
VPS Account get's it own share of the system resources, and
no other account on that box can take from it. This means
that your site will always have the memory and processing
time it needs to respond quickly to your web site visitors.
No one likes slow web sites, and VPS Accounts ensure that
your site has the resources it needs to remain fast.
In the illustrations below, the green orbs indicate server
resources, and how the different types of hosting accounts
share those resources.