A dedicated IP address, often called a Static IP address, is the set of numbers that are used to locate your website or even your computer. Computers don't understand domain names but rather an IP address such as 123.23.58.159. This number is then translated to a domain name that people can understand such as WebsiteToad.com.
The purpose of a dedicated IP address is that it stays constant and is dedicated to just your website. This is necessary for setting up an SSL. If you're interested in some in-depth information click here.
A dedicated IP address would be purchased through your web hosting provider. It's generally a monthly fee on top of your normal monthly fee although some hosting providers will allow you to pre-pay and receive a discount.
Unless you have setup a dedicated server, meaning you're the only one that has websites on it, you are most likely on a shared server. This means that you may be sharing a server with 100s of websites.
This is a reason that hosting has become so affordable. Hosting companies are able to cut down on costs by sharing servers. The way that this is done is by setting up a hosting account, when you choose your username this is typically how you're identified on the server.
For demonstration purposes, say you setup a hosting account and selected the username 'myusername'. An example of your actual website address would be something on the order of .
When you setup a dedicated IP address your website wouldn't share that IP address with everyone else on that server although your account would still be on a shared server.
If you intend on accepting credit cards on your website and plan on setting up an SSL certificate you'll need to setup a dedicated IP address for your website.
This will be required before your hosting provider will be able to install the SSL certificate on your account. You can generally expect the fee to be a couple of dollars per month but I suppose that there a providers that charge more.
I invite you to visit my webmaster forum, it's a great place to discuss websites and ask questions to fellow webmasters regarding topics that you may still have questions on.
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