A domain name is a website address made of a website name, followed by a dot, then an extension like .com (fitsmallbusiness.com, for example). You can receive a free domain by buying web hosting packages that include them or via domain name registrars offering little-known extensions like .tk. Paid domains offer extensions that lends to greater business credibility like .com or .net domains.
In housing terms, VPS hosting is like renting your own apartment in a larger building. You're much more isolated than in the roommate situation mentioned above; it's still possible that a neighboring apartment could causes annoyance for you, but far less likely. In web hosting terms, Site A's traffic surge won't have nearly as much impact on Site B or Site C. As you'd expect, VPS hosting costs more than shared hosting. You'll pay roughly $20 to $60 per month.