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Depend about your site(s) needs.
Free hosting can have a poor support, in many cases your site is a subdomain on hoster's site, you have very limited resources and sometimes they put banners on your site.
Shared hosting (paid, but cheap) allows you to control what is happen with your site, you have more resources (including databases and scripting), and no hoster banners.
VPS (virtual private server) assure you a certain ratio of webserver resources, also you have more control (such as SSH).
Dedicated server means that a full computer is used only by you - you "rent" this computer from hoster, prices are high, but you have the full control. Additional costs could occur if you want cPanel and databases installed. Also you could order the "management" option, which means that a person in datacenter will take care about your server: backups and so on.
Co-located webserver: the computer is yours, but it is leaved into a datacenter where is connected to net. A little bit cheaper solution than dedicated.
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