Definition of VPIP
The VPIP is the "Voluntary Put Money Into pot". It is an indicator of the percentage of time you invest money in a pot of your own free will. This is the essential and primary statistic in your HUD. If you have a tracker like Pokertracker and you display a HUD (heads-up display) on your table, the first two basic statistics you will see are the VPIP and the PFR (shorthanded).
Why is VPIP important?
Knowing a player's VPIP is important because it gives us an idea of their playing style. If we play a table of shorthanded for example, we know that at most, one out of every three hands is playable, which should give a VPIP of about 33%. But if you see a player with a VPIP of 75%, he is playing too many hands and therefore either he will have to bluff a lot to make those hands profitable or he will be a very losing player playing all those hands. Conversely, if a player has a VPIP of 8%, you know that he will only play very good hands and you know that you will have to have very good hands to compete against him.