One typical use case for virtual hosting is when you use hosting services run by ISPs.
Many small businesses do not need, or cannot afford, the cost of running a Web site hosted on a dedicated server or a cluster of servers, and hiring IT engineers to maintain them. Therefore they go for 'shared' hosting plans at ISPs, and these ISPs run multiple Web sites on a single server machine- or even on the same web server instance. Running of more than one Web site on one server is called virtual hosting. As you would have seen from the Wikipedia link, these can be implemented in two ways- IP or name based; each with its own advantages and disadvantages.