groovin, first of all, VPN is a marketing term that is used by different people to mean different things. For example, some marketing folks will call the frame and/or ATM networks with VCs you've used before "VPN"s. Frequently, VPN is used to refer to IPsec ESP tunnels, which can as a very rough concept be thought of as point-to-point virtual circuits that use the public Internet as the low-level transport. IPsec ESP tunnels are typically encrypted and integrity protected, which is a nice bit of security. A router that can be an IPsec ESP / IKE endpoint is typically called a "VPN gateway" or something like that, but it's basically just a router with encryption.
The main upsides to an IPsec ESP VPN are that they're cheap (just use commodity IP bandwidth) and fairly easy to set up (well, no fighting with telcos

) and encrypted. The main downsides to an IPsec ESP VPN are that they are less reliable than a truly private network (again because they use commodity bandwidth) and that the current implementations and the IKE protocol are more complicated then they should be.
PPTP could also be called a VPN technology, but you simply shouldn't be using it.