I have a website and some blogs which I host on a shared hosting server. As my website and blogs are still new and don't get so much traffic yet, I never encounter any problem with the server. I read that a VPS provides better capacity and performance than a shared hosting server does. When should I move to VPS?

You should move to VPS when your resources is not enough due to massive traffic. I'm not saying that you will wait for your traffic to increase before you can transfer to VPS because it is always better to have a VPS than a shared server. You can manage your website much faster and more efficient when you have VPS. Upgrading to VPS also depends on your budget because you will pay more for VPS.

Thanks Sleepyhead for the advice. I know that if budget is not an issue, it is better to go directly for a VPS or even a dedicated server. When is the resource considered not enough to handle the traffic to my websites? I mean, how many percent can the traffic take of the shared server maximum capacity before I have to move to VPS?

When the website is slowing down because of traffic then that's the time you upgrade. But don't be fooled though because sometimes its the server or some virus attack can cause the slowing down of your website. Practically speaking, when about 70% of your shared resources has been used up then you should start thinking to upgrade.

I see. It means I should check the website stats to make sure that the slowing down is due to the increasing traffic instead of virus attacks. Btw, I just remember that I am using shared hosting service with unlimited storage space and bandwidth. I wonder how to calculate 70% of the unlimited bandwidth. What is the common sense?

Unlimited storage space is not possible and its only an advertising scheme to attract people. I might be criticized by many webhosting companies for saying this thing. When your website is slowing down due to traffic then you will surely know about it. The 70% that I wrote is just theoretical and you don't have to really compute it.

Most possibly, yes. But I think you are saying right. It just doesn't make sense to expect the really unlimited space storage and monthly transfer for $3.95 a month (I paid upfront for two year hosting service)

The unlimited hosting packages are really unlimited to some extent. In your control panel, you will really see the stats like "140 MB of 00 GB". I purchased an unlimited hosting package to host my website and blogs. I never got any problem even when the website and blogs get decent traffic.

If that is the case then it will be the web hosting company's loss and your gain. I'm not sure though if your website will still be fast when it reaches an amount of traffic that needs a lot more resources to run with. Remember that websites don't only run with storage but with the memory and the processor of the server as well.

What exactly is the difference between a VPS and a shared server? Is it that VPS is just on your own and shared is something where you share it with people who are also using the same server?

You have answered your question. You were right about the VPS being controlled only by you. Shared hosting is can be explained by its name because you are sharing the sharing resources of one server.

If you have so much resources from your VPS that you are not using then you can share it by reselling it. You can earn an extra income from reselling.