There used to be two main players in the VDS software market, User-Mode Linux (UML) and SW-Soft's Virtuozzo. Recently, VDS vendors have been offering servers featuring a new virtualization software, the University of Cambridge's Xen virtual machine monitor. Xen offers highly efficient virtual servers, with less than 5% of the host server's processing power lost to the virtualization process. By contrast, UML's documentation refers to an overhead of 30% (although advances in its code may have lessened this somewhat). Another selling point for Xen is the fact that it comes without a price - the Xen code is released as free software under the GNU Public License (GPL).
Since the virtual dedicated server providers don't have to pay for the Xen software, they can offer accounts for a lower price than if they were setting up their virtual servers using Virtuozzo. Generally speaking, the low-end Xen VDS accounts are less expensive than the cheapest Virtuozzo accounts. One slight drawback is the fact that the Virtuozzo software includes a very nice graphical interface and some powerful standard features. A customer who learns how to administer a Virtuozzo-based VPS can purchase from a variety of providers and be capable of using their accounts without having to relearn how to use the software. Xen administration software is currently not standardized - virtual server providers have to write their own, and as a result, a consumer who purchases Xen accounts from multiple vendors will generally have to learn the idiosyncracies of each host's software.