20/04/2010 - Shared hosting, where you share a server with lots of other users and have very limited control over the server. Dedicated hosting, where you have complete control over a server; a very flexible option, but requires you to manage the whole server, worry about hardware failures and backups, and is typically expensive.
A third option that is in between these two choices is a Virtual Private Server, or VPS.
VPSs not only bridge the gap between shared and dedicated hosting, their virtualized nature provides other advantages such as instant reinstallation of the operating system, quick recovery and backup, and fast and simple hardware upgrades (the hardware is virtual, after all).