Shared Hosting vs. VPS

Q: Do you have Shared Hosting or Virtual Private Servers (hereafter VPS)?
A: Shared Hosting.

Q: What's the difference?
A: On a Shared Hosting server, the resources of that server are shared between the customers that are on it. On VPS, the server resources are divided and pre-defined for each customer for their own use. They can't use more then they were pre-defined to have.

Q: So what does that mean?
A: The real difference is in the performance. The Shared Hosting performance varies and depending on the resources in use can be very good or not so. As for VPS, it remains constant but will never give you the full abilities of the server, since you are limited to what your hosting plan was assigned.