Example path-based site collections :
Team A has a site collection http://contoso.com/sites/teamA
Team B has a site collection http://contoso.com/sites/teamB
Host named site collections :
Host headers allows the web server to host multiple web sites on the same IP Address and Port combination. If the incoming HTTP request includes a host header name, and a matching host header is configured in IIS, IIS will respond with the content from the appropriate web site.
Host headers are configured at the Web Application (IIS website) level, they are one of the website bindings properties.
It is important to understand the distinction between Host headers in IIS and Host Named Site Collections. Host headers at the IIS website level are only intended for path-based site collections.
When using Host named site collections, SharePoint is responsible for resolving the correct site for the address based upon the incoming request passed through IIS. In most cases, applying a host header binding at the IIS website level makes it impossible to access host-named site collections through the IIS website. This is because IIS will not respond to requests for host names that differ from the host header binding.
|If an existing web application has a host header binding set, IIS will not return pages from the host-named site collection until you remove the binding from IIS. For more information, see Update a Web application URL and IIS bindings (Office SharePoint Server 2007).|
You can use host-named and path based site collections in the same web application. To ensure that both types of site collections are accessible to users, do not put host header bindings on the IIS website of your web application, including IIS websites for zones that are extended from the web application. If an existing web application has a host header binding set, IIS will not return pages from the host-named site collection until you remove the binding from IIS.