Specifics differ from host to host but overall with virtual hosting you are sharing resources, so you are subject to other users and their bad scripts, bad habits, their potential to be exploited, or otherwise have the server compromised and possibly your 777 data files altered. Problems are more common just because there is more going on in the system.
Virtual hosting also runs on various control panels so often times moving everything to a dedicated server isnt a simple procedure because often times the paths used on the virtual host arent the greatest amongst other complications.
VPS eliminates several of these issues such as pooling resources and lessening your liability, but at the same time the costs are also higher and usually are in line with usage. So if you are pushing traffic that makes sense for a dedicated server you wont be saving much by going with a VPS. Then also you have hardware failure and depending on the backups its easier when your host is only recovering one client per server as opposed to several.
There are other factors involved, its all about finding the balance that works best for your budget and regardless of what you choose just do your own backups and you have a very nice buffer against a ton of different failures.
