Im currently wanted to start a webhosting company, i just wondering which choice will be best...

Colocation or dedicated server

And what actually the different?

hmmm...if your just wanting to start out, you should probably start as a reseller for awhile and learn what its all about before you sink the money into your own servers...

It really goes by each individual circumstance.

What's your level of knowledge? What kind of funds do you have? etc.

Experience is always the first thing to think of. If you have lots of experience, you should definately colo a server or lease one. You should see the ups and downs of each option. If you're new to the business, I suggest reselling as an option. This will get your hands wet enough for you to handle the day to day troubles of hosting. It will teach you how to handle customers as well as resolve problems. Although you won't be able to troubleshoot a lot of the problems, reselling for a good company is crucial. You don't want to resell for a company who is going to leave you in the dark. After you have enough customers, you can get think about colo or lease. Hope this helps.

Here's how many hosts start out:

1) Reseller
-> You get a feel for the industry, trial and error, get better at it, grow your marketing skills, etc, etc. Very little room to work with.

2) Dedicated Server
-> Learn to manage your server, offer 100% support on your end, without going to the main techs. You can play around more here.

3) Co-location
-> This is where hosts usually get bigger and bigger. You have 100% control of everything, except for the bandwidth prices :)