A client asks the difference between Shared, VPS, and Dedicated servers ... and my partner goes: shared hosting is like having room mates in your apartment, VPS is owning the apartment, and Dedicated is owning the apartment building.
To most clients that is just good enough explanation. I would have ventured into OS installation, CPU, and memory sharing and that sort of stuff to explain the difference for the client - which in all honesty are rarely interesting to the clients.
Edit:
Forgot the note to self: learn to simplify.