Shared web hosting is the most popular hosting type. You share a web server with hundreds of web sites that means that your website is placed on the same server as several hundred other sites. This is a very cheap hosting solution because you are not only sharing webspace and traffic bandwidth but also the cost. On the other hand you dont have too much control of performance and reduced security and traffic volume due to many sites on one server. A shared hosting solution should be the right way for almost all small business and average traffic websites.
Reseller hosting solutions are ideal for those who want to make money in hosting industry and become Web hosts themselves. You contract with a hosting provider to sell their server space under your brand. Reseller hosting packages usually contain a large amount of webspace and bandwidth that you can devide and resell to as many customers as you wish. These reseller accounts are placed on the same server as other reseller accounts, which means that you are sharing webspace, cpu resources and traffic bandwidth, like with shared hosting but with fewer accounts.
Virtual Private Servers are the best solution for customers who need more power, control and flexibility than a shared hosting account can offer but dont want to pay too much as for a Dedicated Server.
VPS's enable one physical server to house several Virtual Environments which act like an isolated stand-alone server. Each VPS is in a completely isolated environment that is almost equivalent to a dedicated hosting environment.
Signing up for a dedicated web hosting package means that you get your own server to host your web site(s). This is the most expensive form of hosting. Dedicated Servers are best suited for large businesses or web sites with high traffic that require special programming or powerfull email solutions. Dedicated Hosting Solutions are very powerful and secure but expensive and require higher skills maintenance and protection.