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VPS Hosting (Virtual Private Server) also sometimes known as VDS (Virtual Dedicated Server) is when a Dedicated Server is sectioned up into several virtually dedicated servers that are enclosed and private from the other virtual servers on the dedicated host server or Node. This is made possible with certain software that manages and creates these virtual machines.
Each virtual server is given a set amount of resource usage limits. The virtual servers do not interact with each other or share system resources in the same way shared or reseller hosting does.
The virtual servers each have their own operating systems and can in most cases be configured completely unique from one another.

The software used for VPS management may be Xen, OpenVZ, Virtuozzo orVMware.
Each have their own pros and cons leading to some being more commonly used for typical VPS hosting.
Some of these are not as strictly speaking private or dedicated. Some allow for bursting of resources and/or have leaks that may cause one virtual server on the same machine to effect another. Some will share very basic software settings making the virtual private machines not completely uniquely configurable.

Xen tends to be the most secure and reliable. With Xen it is most likely that you will get use of all the resources that were specified when buying and it is very unlikely that another VPS on the same machine will have any effect on yours.
Xen VPS can sometimes cost a little more when compared to the other options because the resources can only be divided in a way that usually means less VPS can be placed on one machine at a time. This of course is less profitable for the hosts which is why there’s usually a slight price increase.

OpenVZ has been quite popular lately though it has not been actively developed or updated for some time and the future of its existence is very uncertain.
Hosts seem to like this option for greater flexibility than some others can provide. OpenVZ does offer burst usage of resources and has been known to cause conflicts between VPS ’s hosted on the same machine if one VPS is using a high amount of resources.
Options that allow bursting of resources usually mean that more VPS can be fit on one machine which is more of a good thing for the host than the client.

Virtuozzo is a slick streamlined interface for both managing the VPS by hosts and clients. It also allows bursting of resources which again may not be the best option.
Virtuozzo is quite easy to use and manage though which is it’s biggest plus, especially for beginners.

Vmware is not so commonly used in the VPS market place but you will see this from time to time. It also allows for bursting of resources and may not be the ideal option.

Another added feature has become quite popular among non-virtuozzo based VPS offers and that is client VPS control panels such as SolusVM.
A client VPS control panel allows clients to manage their VPS through an easy to use we interface. Things like the ability to set their host name, reinstall an operating system, restart the VPS, and even more very useful features are included.
Virtuozzo was the first to offer such a client control panel but other popular Virtualization software such as Xen and OpenVZ didn’t have this option.
An option such as SolusVM makes it much easier for you to manage your VPS and should be high on your priority list when searching for a provider.

In regards to resources and how to choose a VPS plan that suits your needs, here are some things to know.
If you are going to use a control panel such as cPanel, Direct Admin, etc. then you will need a base amount of RAM. This is because the control panel itself (even before you put any websites or additional load on the server) requires a certain amount of RAM overhead to run properly.
cPanel requires the highest amount of RAM. Recently they have tried very hard to get rid of their reputation as a very resource heavy control panel and optimized their code quite a lot but it’s still heavier than any other control panel. So as a general rule, if you’re going to be using cPanel on your VPS and will be hosting one or more sites you will want not less than 384MB of RAM. The recommended amount would be to have at least 512MB. Your requirements will go up from there based on the sites you will be hosting.
Other control panels require slightly less but you don’t really want to go with anything less than 384MB even for the lighter control panels like Direct Admin.

If you are in the market for a VPS for testing purposes and don’t require a control panel then you won’t need nearly as much as a VPS running a control panel.
Many coders like to have  an online testing server setup under similar circumstances as their code will likely be running under when it’s in a live production state.
There may be other uses you have for a VPS such as a Virtual Private Network, etc. If your requirements are this specific then you will likely have a good idea of resources needed.

If you are slightly more tek savy then you can certainly ask the host what server specs their VPS nodes are built on.
A very fast CPU setup is certainly helpful but if the RAM amount is very high such as 24GB, that likely means the server is loaded right up with VPS’s. It can actually be better sometimes to see a good CPU setup with more like 12Gb of RAM. The amount of Virtual Machines that could be fit on a server with 12GB is very reasonable and not likely stretching the CPU too thin assuming it is decent.