Shared: You share a server and all its resources with other sites, sometimes 200!! This is the cheapest form of hosting and is usually only useful these days for a small paged static site.
VPS: These days a VPS can be excellent value, this is a virtual server but you physically get the resources all to yourself, so it acts like a dedicated server. This is a good option for busy blogs, membership sites, forums, ecommerce, etc.
Dedicated: Always go for a VPS first, when you out grow that then you move to a dedicated server, but I run forums with 100,000's of posts on VPS with no problems.
Source: http://www.ukbusinessforums.co.uk/forums/showthread.php?t=292488
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