A Virtual Private Server (VPS) is a perfect and unique blend of a dedicated server and a shared hosting account. In a VPS, though you share system resources like CPU, disk space and bandwidth with other users, but the file system is setup such that you work completely independently, giving you the feel of a dedicated server. Each user is only allowed to use a certain percentage of the system resources, such that these resources are always available to all physical servers at the time of crisis. Basically, a VPS partitions a single server into different physical servers, called VPSs only. The consistency in the usage of resources also makes your website more steady and reliable, as it will always have the same level of access to the CPU and other system resources.
However, there are certain drawbacks in using shared hosting services, particularly the fact that one cannot configure or install ones own software in case of shared hosting. For instance, if you want your web server to use certain technology software like PHP, the host will not have the setup for you. And hence, as a regular user, you will not be able to install the software required to run PHP. On the other hand, VPS system allows you to install any software you wish to, for you have a complete control over your server. You can easily install PHP or any other software, as you may like.
A few web hosting providers though setup VPS differently than other web hosts. The main purpose of using a VPS onto your system is to get better security than a shared host and to have greater control. If all the users on the server have their websites hosted on the same web server, it is not a real Virtual Private System and is not secure either. Having a virtual file system is not an issue, but getting only a part of the total benefit from having a virtual system is not agreeable. You must switch to another hosting company and look for what features they have to offer.