James
its down to speed, when your on shared servers this slows down and google does not like slow sites so vpservers are the best way to deal with this, as an example so you share space on a server with a gaming site this is not going to help plus if you get someone thats doing bad links and you also share that ip that will not help.
Also having more than one server will give you backup if you do anything wrong yourself by mistake.
you can get a vps server for about £15 a month but just like a PC its spec that gives speed so the more you spend the faster your site will be
Respects
Ian Harper