A dedicated server is a web sever that stores files just for your own website. You have full access to the server and you need not to share your resources with anyone.you have full access to shell and command line modes and can install any software programs and applications that you wish.
Dedicated servers tend to cost more money because you will not be be splitting the server costs with anyone else. Unless you really have a big web site that needs a lot of disk space and bandwidth don't go the dedicated server .
A virtual server (also called shared hosting) is a web server that you share with other users. The web server will contain your website's files and also the website files of all of the web hosts other customers. You could share a web server with any number of other customers so it will not cost a lot of money. A dedicated server is good for websites which are just starting out.
You should also know that what others who are on the same server as you do can affect your website. For example, a customer may install a script that will affect the servers performance or in a bad instance the script installed by a user can shut the server down which in turn can shut your web site down.