Shared Hosting
In shared hosting, your website is virtualized together with other websites on one machine. This means that your website shares resources with other websites.
These resources are the CPU, memory and bandwidth allocated to the physical server.
Dedicated Hosting
Dedicated hosting means your site is alone on a server, with no other sites sharing same physical machine, its resources or IP address. It also means that you have the freedom to do anything you want on the server.