virtual servers is when a host sets up one big server and then uses virtualization software to slice it into smaller chunks. The pros are that its a lot cheaper and its safer than shared hosting as the virtualization does add a layer of protection. The cons are all the usual stuff when you are sharing a server, like you are sharing your processing power, ram, disk activity, ip address, etc...which can cause issues if the other sites on the same server are disk or processor intensive or are running unsecure scripts.

Overall, virtual servers are better than shared hosting but not as good as dedicated hosting.