What is the exact difference between dedicated and vps hosting? I have been told so many different things that I'm not sure what to believe. One person told me that its just a space difference while someone else disagreed

Essentially there is no difference other than resources.
With a dedicated server you have the full resources of the server at your disposal. With VPS you have whatever resources the plan offers.

I think with a dedi you have a little bit more resources.

tarsick, most VPSs with dedicated ram actually run faster than dedi servers. The reason is that the servers that run VPSs are big servers that have high speed hard drives, and multiple-multi-core processors. Since most VPSs dont utilize the full allocated resources they can take advantage of the extra processing power and disk bandwidth availible from a high performace machine. Also most hosts will load balance their VPSs on their hardware so one machine doesnt contain many high resource using VPSs.

Check out VPS vs Dedicated server benchmarks.

Joe
AutomatedVPS.com

Why can't a VPS utilize the full allocated resources?

G om,
Each VPS on the server is allocated a minimum amount of resources it is guaranteed. If any VPS is not using its guaranteed amount, other VPSs may use those resources. The exception to this is ram on windows VPSs, windows does not work efficiently with burstable ram. In fact it usually works against the performace of the system as a whole. This is because the VM Hypervisor reports to the windows operating system the burst ram as hardware ram, the Hypervisor then pages this ram to disk while the windows OS thinks that ram is in memory. This is why in microsofts new hypervisor, Hyper-V, burstable ram is not an option. For CPU,Disk, and Network, unsued resources by any of the VPSs will spill over to the VPSs that need it.

Joe
AutomatedVPS.com

It all comes down to the resources, and if a VPS server node is not overcrowded then it would be just like a dedicated really.

Of course however, some customers do not want to be virtualized and as such, it really depends on the customers wants and needs

I'd choose dedicated over VPS anyday

It all depends on the resources available, with either dedicated or VPS. Certainly some VPS' can be faster than a dedicated server.
As many were saying here in this post, if the VPS is on a well balanced "pwer house" server, then it will perform very well in most situations. VPS allow more efficient use of resources and have helped many companies go from "racks" of servers down to just a few servers without sacrificing performance.

That is the you needs size question and nothing more. As for the end customer. Are you looking to view that as web hosting provider?

Price is one more thing that makes then different.

there is essentially no difference, but it depends on how the other customers on the box use the resources. most vps's have raid setups but its possible to see reduced hard drive throughput if someone else is hammering away at it 24/7 for example. you could also get more performance for what you pay for with a vps. its a tossup with vps, with a dedi you get full control over the box and all its variables affecting performance.

There would also be a difference in the issue of security. Although VPS is supposed to be as secure as dedi, you have to hope that the company you are buying from has set it up properly. If they have then it is secure, but if they haven't, then there could be problems.

Having a dedicated server you have the whole server at your disposal.As for the VPS, it is located on a dedicated server(Node) and there can be a couple of VPSs on this dedicated server each of then has limited resources.

VPS is 1/3 the cost of a low end dedicated.. you get more CPU power than you would get from a dedicated that can be 3-4 times the price. In addtion, upgrading memory requires only a minute of downtime.. with dedicated it takes over 30 minutes.Thus,I suppose VPS is more advantageaous.
Also... Xen VPSs offer a more true private environment with full control over the kernel and control over your own iptables and so on.. Virtozzo/OpenVZ is not a private environment.. you are sharing the kernel with others. If there are any security issues, they are going to happen to all the VPSs on that server, where as with Xen, each VPS is completely encapsulated in it\'s own environment.