[krobertson]

KVM is stronger isolation, its a hardware layer virtualization. You can (though the provider might not let you) run a custom kernel, etc.

OpenVZ is more OS virtualization, there is less isolation between instances.

OpenVZ usually has "guaranteed CPU/RAM" and "burst CPU/RAM", while KVM always gives you what its assigned. The guaranteed/burst is typically BS. More often these budget providers like OpenVZ because you get greater density, which means more noisy neighbor and taxed resources like disk IO.

[astrodust]

So basically OpenVZ is what gave VPS nodes a bad name when they came on the market.