VPS is a virtual server which is usually a part of a physical servers but has its own share of resources which are not shared by other VPS. Each VPS customer gets their own secure disk space, bandwidth, file system and process space, without sharing CPU load or applications with any other user on the VPS system.
Dedicated is a physical server and the resources of the machine are not shared with anyone else. Dedicated server mainly is for users who require more resources then VPS and seeking to upgrade to a physical platform. Dedicated servers provide you the full control over your server for its use. Like a VPS, you may choose the operating system or compatible software of their choice which is most appropriate for your business.