If you took the time to read my first post, you would have seen that I explained the difference between VDS and VPS.
If you know a company advertising $3 VDS then he is in no way offering a true VDS. The main difference between VPS and VDS is that VPS are constructed of several small VMs and in the case of openVZ usually always oversold in order to compensate for low price offerings.
With our VDS, Virtual Dedicated Server Line, they are just that a virtual dedicated server, we take a massive system all Quad Cores, with a 16GB of RAM and mount each VPS to a 100+ Disk iSCSI array which solves the issues of storage speed found in typical VPS setups. Each VPS is then assigned 1 or 2 cores guaranteed depending on package but the load can be evenly split across all cores on the system 4 to 8 depending on which server they are on.
What this means is the person is getting the power of a P4 Core 2 Duo with faster disk read and write times than they would ever achieve from a single dedicated server if they purchased one. So we adopted VDS, it is not our fault if some companies choose to market standard vps as a VDS.
It also means that if the customer needs scalability that we can transfer them to a dedicated quad core and as far up as a quad processor quad core system if they ever needed that much power and we can do this with no downtime to them, it saves you money by going this route because you can scale only as you need it and not have to worry about when you need that extra power.