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Choosing Web hosting type can get somewhat confusing if you are not aware of the possible and popular web hosting types available in the market. I have tried to compile a list of possible web hosting types giving brief features of each type. After reading this article you should(hopefully ) be in position to differentiate between all hosting types.

Free web hosting
Free web hosting is offered by different companies with limited services, sometimes advertisement-supported web hosting, and is often limited when compared to paid hosting. A free web hosting service is a web hosting service that is free, usually advertisement-supported. Free web hosts will usually provide a subdomain (yoursite.example.com) or a directory (www.example.com/~yourname). In contrast, paid web hosts will usually provide a second-level domain along with the hosting (www.yourname.com). Many free hosts do allow use of separately-purchased domains.The majority of the hosting companies use free hosting to introduce their services, and as an entry point to their more expensive offerings. Generally they recoup their cost by Advertising, Referrals etc

Shared web hosting
In Shared web hosting, as name suggests, your web site is placed on the same server as many other sites, ranging from a few to hundreds or thousands. Typically, all domains may share a common pool of server resources, such as RAM and the CPU. The features available with this type of service can be quite extensive. A shared web hosting service or virtual hosting service or derive host refers to a web hosting service where many websites reside on same web server connected to the Internet. Each site "resides" on its own partition, or section/place on the server to keep it separate from other sites. This is generally the most economical option for hosting as many people share the overall cost of server maintenance. Shared web hosting can be accomplished in two ways: name-based and IP-based, although some control panels allow a mix of name-based and IP-based on the one server.

Reseller web hosting
Reseller hosting is a form of web hosting wherein the account owner has the ability to use his/her allotted hard drive space and bandwidth to host websites on behalf of third parties. The reseller purchases the host's services wholesale and then sells them to customers for a profit. A certain portion of hard drive and bandwidth is allocated to the reseller account. The reseller may rent a dedicated server from a hosting company, or resell shared hosting services. In the latter case, the reseller is simply given the permission to sell a certain amount of disk space and bandwidth to his own customers without renting a server from a web hosting company he signed for a reseller account with. Reseller hosting is also an inexpensive way for web hosting entrepreneurs to start a company. Most reseller hosting plans allow resellers to create their own service plans and choose their own pricing structure. In many cases, resellers are able to establish their own branding via customized control panels and name servers.

VPS Hosting
A virtual private server (VPS, also referred to as VPS Hosting) is a method of partitioning a physical server computer into multiple servers such that each has the appearance and capabilities of running on its own dedicated machine. Each virtual server can run its own full-fledged operating system, and each server can be independently rebooted. Virtual private servers bridge the gap between shared web hosting services and dedicated hosting services, giving independence from other customers of the VPS service in software terms but at less cost than a physical dedicated server. As a VPS runs its own copy of its operating system, customers have superuser-level access to that operating system instance, and can install almost any software that runs on the OS. Simply put, a VPS simulates a private server in that you, the site owner, can deploy whatever software you want or need to continue growing an e-biz. This isn’t possible with shared hosting plans which limit you to the software options offered by the hosting company, thus limiting the database, checkout and other software you use.

Dedicated hosting
A dedicated hosting service, dedicated server, or managed hosting service is a type of Internet hosting in which the client leases an entire server not shared with anyone. This is more flexible than shared hosting, as organizations have full control over the server(s), including choice of operating system, hardware, etc. Server administration can usually be provided by the hosting company as an add-on service. In some cases a dedicated server can offer less overhead and a larger return on investment. Dedicated servers are most often housed in data centers, similar to colocation facilities, providing redundant power sources and HVAC systems. In contrast to collocation, the server hardware is owned by the provider and in some cases they will provide support for your operating system or applications.

Managed hosting service
In Managed hosting the user gets his or her own Web server but is not allowed full control over it (root access for Linux/administrator access for Windows); however, they are allowed to manage their data via FTP or other remote management tools. The user is disallowed full control so that the provider can guarantee quality of service by not allowing the user to modify the server or potentially create configuration problems. The user typically does not own the server. The server is leased to the client.

Colocation web hosting
Colocation web hosting is similar to the dedicated web hosting service, but the user owns the colo server; the hosting company provides physical space that the server takes up and takes care of the server. This is the most powerful and expensive type of the web hosting service. In most cases, the colocation provider may provide little to no support directly for their client's machine, providing only the electrical, Internet access, and storage facilities for the server. In most cases for colo, the client would have his own administrator visit the data center on site to do any hardware upgrades or changes.

Cloud hosting
Cloud hosting is a new type of hosting platform that allows customers powerful, scalable and reliable hosting based on clustered load-balanced servers and utility billing. Removing single-point of failures and allowing customers to pay for only what they use versus what they could use.

Clustered hosting
Clustered hosting is having multiple servers hosting the same content for better resource utilization. Clustered Servers are a perfect solution for high-availability dedicated hosting, or creating a scalable web hosting solution. A cluster may separate web serving from database hosting capability.

Grid hosting
Grid hosting is a form of distributed hosting is where a server cluster acts like a grid and is composed of multiple nodes.

Home server
It is usually a single machine placed in a private residence can be used to host one or more web sites from a usually consumer-grade broadband connection. These can be purpose-built machines or more commonly old PCs. Some ISPs actively attempt to block home servers by disallowing incoming requests to TCP port 80 of the user's connection and by refusing to provide static IP addresses. A common way to attain a reliable DNS hostname is by creating an account with a dynamic DNS service. A dynamic DNS service will automatically change the IP address that a URL points to when the IP address changes.