Bandwidth refers to data transfer; the amount of data that is downloaded, and onto how many computers. Every time someone visits your website you will use bandwidth, and you will typically start with a limited supply of it when you sign up with any web host. You never have to use all your bandwidth, and if you go over you'll usually just be charged additional fees for the extra amount used.
However, if you're going to have multiple websites with the same web host, you're going to have a certain amount of bandwidth allotted to each server. It's all in the way you look at it, and how much bandwidth you want to use per server. If you have many different sites with the same host, they might €pool€ your bandwidth and allow you to distribute it between your sites any way you want. This is a good thing, and it's definitely something you want to look for from any host if you're going to have different sites.
So why would web hosts not offer bandwidth pooling?
The reason is because some web hosts figure that if there's bandwidth on the server that's never going to be used, they can overcharge their customers for it and know that they'll never suffer any consequences from it. This tactic is known within the industry as €overselling,€ and if you suspect that this is what your web host is doing, you might be better off choosing a different host. Overselling is simply a technique used by some hosts strictly to make more money; and it won't benefit you at all.
Bandwidth pooling on the other hand, is something that will be very beneficial to you. It's especially useful to businesses that use some servers to store their online content, and other servers to house their offline data such as inter-office filing systems. These business owners might want to reserve their bandwidth and use it mostly for the server that's storing online information such as the company website. Chances are good that this is the server that will need it the most and so, it's helpful if business owners can just reserve this resource for this server.
When it comes to bandwidth, most website owners only concern themselves with how much of it they're getting. But while this is an important consideration, you also need to ask whether or not your web host offers bandwidth pooling, especially if you're going to have more than one site with the web host. It will definitely matter in the long run!