A dedicated server is a single physical machine that is leased to one customer. The customer has full control over the server and can choose to run any operating system or applications they desire. A virtual private server (VPS) is a type of hosting where each user has their own isolated environment on a shared physical machine. Both dedicated servers and VPS can provide good performance for high-traffic websites or resource-intensive applications, but VPS may be more affordable since it uses shared hardware resources.