*Shared Host:
One server will serve multiple web site (about 100/server). So, your web site will be placed on one server with others web site. You will get space for your scripts, database and mail based on package you buy. Usually 50% for script+database and 50% for mail. Some web hosting offer unlimited space, such Unlimited Hosting at GoDaddy.com.
Pros:
- Cheapest choice, its about $ 4/month.
- They take care system administration
- Backup/restore of your data. You shouldn't worry lost your data.
- Usually offered with domain registration, buy 1 get 1 free :).
- You share server resource with others web site, perhaps your web site will get interrupted if one of web site on same server get problem.
- Less secure: Imagine you live in flat with strangers compare to live in your own home.
*Dedicated Server:
Dedicated Servers at GoDaddy.com as our example. Its mean you rent a server from them, dedicated for your web site. They will offer specification of server (processor, RAM, disk capacity, etc.), bandwidth speed, numbers of IP address you need (example you need 2 IP address, one for monitoring and one for your user). Yes, this service is best in performance since your web site served by qualify hardware+infrastructure and you not shared it with anyone else :), but you must master system administration and have your own good backup/restore system. Web hosting will only setup your system, you must administer it by your self (install and maintenance web server, email server, database server etc).
*Colocation Server:
You have your own server and place it in web hosting infrastructure. They will charge you for bandwidth, IP address, power etc. You may chose bandwidth and number of IP address according to your budget/need.
*Virtual Private Server:
This is combination of shared hosting and dedicated server. One server serve multiple account, but each account has its own resources. It accomplished by using virtual Operating System technology such as Xen, Virtuozo and VMware.
Pros: You will get as cheap as shared host in price, with predictable performance like dedicated server. You also may upgrade your virtual machine (size of RAM, space or processor resource, bandwidth speed and number of IP address).
Cons: No backup/restore, no system administering service. They will only do initial setup virtual machine (install OS, set IP address).
I hope this information useful.