A virtual host is a method where multiple domain names can be handled for multiple clients if need be. They all share the same physical computer and it’s resources, but are separated for the purpose of logging activity and billing for each client. Each client is able to use FTP to transfer files to their server space and are restricted to only their designated space on the server computer. This typically allows the service provider to charge less to each client because they are all sharing one server computer.
The two main types of virtual hosting are name-based and IP-based. The name-based virtual hosting uses the host name presented by the client which allows multiple domain names to be placed on the same IP address which further conserves resources. IP-based virtual hosting uses a separate IP address for each host name so that every client with a domain name has a unique IP for their domain. Because there are a limited number of IP addresses, more and more virtual hosting plans are name-based plans.