Domain names are created to make IP addresses easy to remember. Every computer has an IP address assigned to it - much like a street address. But instead of having to memorize each IP address number, we assign domain names to these numbers so we can easily remember them. The domain name system, or DNS, takes domain names and translates them into their IP addresses so that computers can communicate with one another.
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Partitioning a single server to appear as multiple servers has been increasingly common on microcomputers since the launch of VMware ESX Server in 2001. The physical server typically runs a hypervisor which is tasked with creating, releasing, and managing the resources of "guest" operating systems, or virtual machines. These guest operating systems are allocated a share of resources of the physical server, typically in a manner in which the guest is not aware of any other physical resources save for those allocated to it by the hypervisor. As a VPS runs its own copy of its operating system, customers have superuser-level access to that operating system instance, and can install almost any software that runs on the OS; however, due to the number of virtualization clients typically running on a single machine, a VPS generally has limited processor time, RAM, and disk space.
Because web hosting services host websites belonging to their customers, online security is an important concern. When a customer agrees to use a web hosting service, they are relinquishing control of the security of their site to the company that is hosting the site. The level of security that a web hosting service offers is extremely important to a prospective customer and can be a major consideration when considering which provider a customer may choose.
A complex site calls for a more comprehensive package that provides database support and application development platforms (e.g. ASP.NET, ColdFusion, Java EE, Perl/Plack, PHP or Ruby on Rails). These facilities allow customers to write or install scripts for applications like forums and content management. Also, Secure Sockets Layer (SSL) is typically used for websites that wish to keep the data transmitted more secure.
On the topic of dedicated hosting, many web hosting services also offer managed hosting. This type of hosting sees the web host act as your IT department, handling a server's maintenance and upkeep. This hosting option is something that you'd typically find with dedicated servers, so it's a business-centric addition. Naturally, it adds a few bucks to the hosting cost, but nothing that should break the bank if you have the resources for a dedicated server.