Managed Hosting: this basically means that the company that is hosting your website manages everything that is required to give you an online presence for your website. That means from hardware, software, internet backbone connection, maintenance, upgrades, backups and everything else you can imagine. One you are signed up all you have to do is create web pages, set up your email and decide on the services or products you want to have on your website.
Dedicated hosting account: The service provider will own and manage the hardware and take care of the networking and internet connectivity, backups and maintenance. In this case the entire server is dedicated for just you. Usually the software will allow you to host more than one website. With this type of service you are allowed some control over how the server itself functions.
Colocation: This is a whole different world. With collocation you purchase and own both the hardware which is the server and the software that will host your web presence. On top of that you are responsible for properly setting up and configuring both. You are free to choose the combination of services that best meets your needs from a company that you choose to work with. Once you decide on the company you are provided with space in a data cabinet in their facility, power for your equipment, IP addresses for your use and an uplink port for you to connect your equipment to their network, which will lead to the internet.
There is a lot more information on collocation and if this interests you it is worth looking deeper into it and getting the services you need.
XO Communications (http://www.xo.com/) provides leading voice, data and Internet, VoIP and managed services for businesses and carriers who need a proven, responsive, and cost-effective alternative to phone company monopolies. Billings Farnsworth is a freelance writer.