Hosting can be FREE, SHARED or DEDICATED.

Free Hosting

Some service providers offer free web hosting.

Free web hosting is best suited for small sites with low traffic, like family sites or sites about hobbies. It is not recommended for high traffic or for real business. Technical support is often limited, and technical options are few.

Very often you cannot use your own domain name at a free site. You have to use a name provided by your host like http://www.freesite/users/~yoursite.htm. This is hard to type, hard to remember, and not very professional.

Good:  
Low cost. It's free.       
Good for family, hobby or personal sites.            
Free email is often an option.                

Bad:
No domain names.
Few, limited, or no software options.
Limited security options.
Limited or no database support.
Limited technical support.

Shared (Virtual) Hosting

Shared hosting is very common, and very cost effective.

With shared hosting, your web site is hosted on a powerful server along with maybe 100 other web sites. On a shared host it is common that each web site have their own domain name.

Shared solutions often offer multiple software solutions like email, database, and many different editing options. Technical support tends to be good.

Good:  
Low cost. Cost is shared with others.     
Good for small business and average traffic.      
Multiple software options.     
Own domain name.    
Good support    

Bad:
Reduced security due to many sites on one server.
Restrictions on traffic volume.
Restricted database support.
Restricted software support.

Dedicated Hosting

With dedicated hosting your web site is hosted on a dedicated server.

Dedicated hosting is the most expensive form of hosting. The solution is best suited for large web sites with high traffic, and web sites that use special software.

You should expect dedicated hosting to be very powerful and secure, with almost unlimited software solutions.

Good:  
Good for large business.           
Good for high traffic.     
Multiple domain names.               
Powerful email solutions.             
Powerful database support.       
Strong (unlimited) software support.     

Bad:
Expensive.
Requires higher skills.

Collocated Hosting

Collocation means "co-location". It is a solution that lets you place (locate) your own web server on the premises (locations) of a service provider.

This is pretty much the same as running your own server in your own office, only that it is located at a place better designed for it.

Most likely a provider will have dedicated resources like high-security against fire and vandalism, regulated backup power, dedicated Internet connections and more.

Good:  
High bandwidth.              
High up-time.    
High security.     
Unlimited software options.

Bad:
Expensive.
Requires higher skills.
Harder to configure and debug.

Your Checklist

Before you choose your web host, make sure that:

    * The hosting type suits your current needs
    * The hosting type is cost effective
    * Upgrading to a better server is a possible solution
    * If needed, upgrading to a dedicated server is possible

Before you sign up a contract with any hosting provider, surf some other web sites on their servers, and try to get a good feeling about their network speed. Also compare the other sites against yours, to see if it looks like you have the same needs. Contacting some of the other customers is also a valuable option.