There are many differences between the shared hosting and the VPS service related to performance space, traffic or even for the application compatibility.

The major difference between these two services is the resource usage. On the shared hosting environment the resources of the server are used by all of the users located of the shared hosting environment. This could cause many loading speed issues for some of the users .

Other difference is access level. On a shared hosting server each user have access to his/her own account and cannot access other accounts. This is much different from the VPS service where you will receive access to all of the accounts and even to the system services if you need to make some changes.

Another difference is the applications you are using. The VPS service comes with custom configuration which cannot be performed on the shared hosting environment. In other words if the applications you want to use are incompatible with the shared hosting environment services you can run them on VPS.

Also you are able to run many loading speed improving applications which you cannot run on the shared hosting environment. Such are the caching modules for apache.