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I think the answer to your question is ... that the real difference TYPICALLY (not always) been a dedicated server and a virtual host is that you share that server with 20, 30, 40 - sometimes 50, 60 or 70 other people. If they are running some crazy crap to drag things down, then sometimes the other people on the same server can suffer.
Some other things to keep in mind ....
Some "virtual" hosts don't give you your own IP. Always ask for it. Sharing a server with 100 other zillion people is bad enough, don't get a search engine ban for sharing their IP too. ^^
Some virtual hosts say they offer X amount of bandwidth per month but what you don't realize is they cap how much you can use at any given time. This can really hurt you in the long run. Ask your potential web hosting companies about this. Despite what some companies will try and tell you, not all of them do it.
Some virtual hosting companies put limits on how much CPU usage you can use (see above). If you run a lot of scripts or one script with a lot of traffic, this could be a problem for you. Again, ASK - be honest about what you are doing, plan to run, etc.
But don't let all of that scare you off ... for the most part, getting a virtual hosting account (with a dedicated IP) is a great solution for the small or starter site. Just ask a lot of questions before giving anyone your money.
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