VSS: vswitches is configured on each ESXI/ESX host.
VDS: The configuration of VDS is centralized to VCenter Server. The Esxi/esx 4.x and ESXi 5.x hosts this belong to a dvswitch does not need further configuration to be compliant.
These features is available with both types of virtual switches:
- Can forward L2 Frames
- Can segment traffic into VLANs
- Can use and understand 802.1q VLAN encapsulation
- Can has more than one uplink (NIC Teaming)
- Can has traffic shaping for the outbound (TX) traffic
These features is available only with a distributed Switch:
- Can Shape Inbound (RX) traffic
- Have a central unified management interface through VCenter Server
- Supports Private VLANs (Pvlans)
- Provides potential customization of Data and Control Planes
Source
==============
Overview of Vnetwork Distributed Switch Concepts (1010555)
http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1010555
Differences between vnetwork standard switch (VSS) and vnetwork distributed switch (VDS)