Hosting is essentially pool mining.The only difference is that when your miner is hosted you do not have to do anything, absolutely nothing. Hosting is when a company does all the work for you for a small fee, such as 2.5% of the coins you mine. When they host it they have your mining machine and direct it toward whatever pool you want and then they take care of electricity costs, housing, internet, and uptime. This is a very good deal considering these things can become very expensive and a hassle. All you have to do is buy the machine from a company that offers hosting such as Gawminers and tell them you want it hosted when you check out. Instead of them shipping it to you and you having to do all the work, they take care of it. All you have to do is buy the machine and start earning profit.
This is the best way to mine.