A virtual server is basically a partitioned  drive on a main server.  Multiple virtual servers can be created from a single server which would have capabilities  of acting as a separate serve altogether i.e. a virtual server can be run  full operating system as well as be rebooted without affecting other virtual servers. First, the physical server booted in normal manner. Once the boot process has been completed, a program is executed which boot all virtual servers at the machine.Virtualization can be of two types:

1.Software Virtualization

2. Hardware Virtualization

The first one, Software Virtualization, is mainly used for web hosting services wherein the same kernel is used.In hardware virtualization , hardware resources are partitioned accordingly. virtual private servers are mainly used for security purposes. For instance, if you require installing of a software that might have bugs, It would be wise to install and test it on a virtual server so that the main server is not effected in case it contains any bugs.