If you buy a dedicated server and don't choose the management package, then we don't manage it. You are essentially renting a server, some rack space, and some bandwidth from us. We load the OS and control panel you choose and turn it over. No monitoring, no patching, no automatic reboots. It's unmanaged.
For $9.95 a month we will put your server into our server monitoring program, which means someone will be watching your server 24/7/365, and if load spikes or services go down or whatever, we'll take a look. If it needs to be rebooted we will do so at no charge. We will notify you of recommended software updates to your kernel, php, apache, or whatever, and will assist in the upgrades if needed. We will install the APF firewall as well as RKHunter. And of course we'll set up your remote backups if you need help with that.
You also ask how this is different than the level of service on our shared servers.
The main difference is that the shared server is ours and the managed server is yours (at least for the purposes of this discussion).
If we notice an issue on a shared server we're going to just fix it, because it's our server and we can do what we want with it.
If we notice an issue with your managed dedicated server, we will notify you and work with you to fix it, but we're not going to just go in and start making changes that might break your configuration without your permission. (Unless it's a real emergency in which case we reserve the right to protect our network and systems.)
If you have any other questions feel free to ask, or swing by http://firstname.lastname@example.org
to speak with a sysadmin.