The first thing to do is explain the different types of hosting.
These are the three major types of hosting.
1. Shared Hosting is a server that you 'share' with other users. All users will have access to all the resources the server provides. This is the cheapest option hosting companies provide. Most plans sell for between $5 to $10 dollars a month. If your just starting, start with this setup.
2. Virtual Private Servers (VPS) are the middle ground between shared and dedicated. This setup combines features from shared hosting (like multiple users on one server) but separates the users a little more. Think of it like building a server within a server. Each user has a set amount of RAM and CPU cycles. Unlike a shared hosting where you all share the RAM and CPU, you get dedicated resources other users can't utilize. Most plans go between $40 to $80 dollars. The reason for the larger price spread is you can add more features, like RAM upgrades.
3. Dedicated Servers is strictly for the big boys.With a dedicated setup you get your own server. You have the whole system to do what you want. No other users to hog up precious RAM or drain the CPU. Most hosting companies won't give you root access (e.g complete control) but this is the most flexible and powerful way to serve your web pages. Prices can fluctuate dramatically, with prices ranging from the high $200 to the low $500's. Starting off you will most likely not need a whole server, but hopefully one day!
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