MPLS:
MPLS (Multi-Protocol Label Switching) is a Packet forwarding technique commonly used these days. The name itself indicates that this is a switching technique. To explain this, we will take a real world example; think about a postal system internal to a country, Postal Code is introduced to make the sorting easy. It is a kind of a routing mechanism from one part of the country to another part .Postal code is used as label to switch the letters in the postal backbone across the country. Once the letters collected in local postal exchange they sort them by postal code and put it in a bag labelled with destination postal code. This is easy rather sorting the letters by looking at their destination addresses. So these bags will be sent to nearest postal exchange of the destination postal code. At that office they remove the bag and sort the letters by destination addresses.
Similar Scenario in IP Networks, consider a national IP backbone of a country, When a IP packet reaches the entry router of the backbone network, for switching efficiency (mainly) we label them with label exactly like postal code scenario. Entry router is called as Ingress router in MPLS terminology which applies label on top of each packet. Relevant and important parameters of IP headers will be mapped to label headers. Then these packets will be switched in the backbone network via LSP (Label Switched Path) decided by the core routers. So Core MPLS routers will do mainly the switching function with lots of techniques to ensure Quality of Service and Traffic Engineering aspects. Routers in between, referred as transit routers perform label swapping function as they switch labelled packets from port to port. The backbone destination router where the packet supposed to leave from core network is referred as Egress Router, which removes the label and sends as IP headed packet. Hereafter IP routing will take care of the packet delivery to designated IP address.
VPLS:
VPLS (Virtual Private LAN Service) is one of the services from a bunch of services offered over a managed MPLS network. VPLS is an Ethernet based point to multipoint layer 2 VPN service that allows to connect dispersed Ethernet LAN in a corporate network.
Since Ethernet is preferred LAN technology, to extend this LAN services to geographically dispersed customer locations located anywhere, the VPLS is introduced. VPLS provides Ethernet interface to users over the boundaries of LAN and WAN for customer and service provider. All services in VPLS is same as LAN services.
Summary:
(1) MPLS is a switching protocol considered to lie in between Layer 2 and Layer 3 in OSI Model.
(2) MPLS is a technology for switching and VPLS is one of the services which run on MPLS.
(3) MPLS supports Quality of Service in the Core network with Traffic Engineering.
(4) VPLS is a virtual LAN services run on Manage IP/MPLS services inspite of geographical location.
Reference for VPLS: RFC 4762