Virtual private Servers are used in Webhosting Industry to use multiple operating systems on same server hardware. This is same as using multiple computers with distinct hardware and thus reducing infrastructure , energey, and maintenance costs
Earlier it was termed Virtual Dedicated Server(VDS) , and this is less often used nowadays
The Guest system may be fully virtualized, paravirtualized, or a hybrid of the two.
In fully virtualized environment , the guest is supplied with virtualized hardware set and is unaware of the physicl hardware. the hypervisor receives request from guest and convert it in to appropriate resource request to the host. This method doesnt require any change in OS but the CPU Should support Virtualization
in paravirtualized cases guests are aware of the hypervisor and native interfaces and there by offering real time OS erfpormances as OS interacts with native hardware. this is accomplished with a new layer of software from hypervisor providing this kind of interaction