Generally if you are not technically knowledged and don’t know how to manage the server, such as security updates, configuration of Apache or IIS web server and such then you would usually opt for a managed server where the hosting provider staff carry out these aspects for you.

Dedicated / Managed servers are usually chosen over shared / reseller if you have a custom script which cannot operate on a shared hosting environment as you don’t have sufficient level of access to the server or if you have a very high amount of bandwidth / disk space or server resources.

I am sure other members will provide you with some additional insight too