Shared web hosting is the most common type of hosting and is available in many different configurations. 

Web sites and email hosting is provisioned on a shared server infrastructure, often with a web based management console and backups as part of the monthly or yearly subscription costs. 

Advantages 

Shared web hosting is perfectly adequate for 9/10 web sites running the most common web technologies, such as Apache, PHP and MySQL or Internet Information Server (IIS) and Microsoft's .Net application framework.  The ISP will maintain the hardware, operating system patches and security on shared hosting.

Disadvantages

You are limited to the applications and systems that the ISP provides as part of the hosting package. Some ISP's overload servers and web site performance may suffer.  Generally there is a fairly mediocre amount of disk space available.

Summary 

Shared hosting is fine for 9/10 web sites and there has to be good reason to go to a VPS or dedicated server, for example;

• Large amounts of disk storage or RAM required
• Many 100's or 1000's of domains, web sites and email addresses are required
• You have a big enough budget to see a dedicated server as a premium solution