Did you guys take a look at the soon to come Virtual Server (http://tera-byte.com/vir.html) of Tera-Byte?

I can't afford a dedicated server, so maybe this is my solution.

Can you guys tell me what the advantages and disadvantages are of a virtual server?

It's something in between.
I would choose it if I need root access but can't afford a dedicated server. But still, it is no dedicated and there will be limits - not only regarding performance (they won't let you use 100% of the real servers CPU time) but maybe also regarding software installation.
If you don't need root access I will ask a host and negotiate a normal virtual package which fit's my needs.

If you don't need root access I will ask a host and negotiate a normal virtual package which fit's my needs.

Ok, maybe a stupid question, but what is root access? And why should I need root access?

root is the name of the superuser or administrator of a Unix-box. root access means you can do anything what you want on the machine (including some destruction :) ).

not only regarding performance (they won't let you use 100% of the real servers CPU time) but maybe also regarding software installation.

Yes and No. The 100% CPU use is not true. You are not limited, but guaranteed a amount. If there are 10 VDS's on a physical server and no one is using CPU, then you get all of it. If a few other VDS's are using CPU, you are guaranteed to never get below your given amount. 100% CPU at 100% of the time, No. But that is why it cost so much less.

Software installs you are correct. We have had a hard time installing numerous apps.

As far as Tera-byte, do a search here. Someone had an issue with the a while ago with their VDS and never received support that I know of. Tera-byte just started offering these, and I know for a fact there is a lerning curve with what you can and can't do with VDS's. I would recommend using another provider -

www.olm.com
www.superb.net
www.remarkablehosting.com (New, but the owner worked support for Ensim)

You can learn more about the VDS and what it does at www.ensim.com