VSB is a modulation technique that is a compromise between DSB and SSB. It allows the complete desired sideband along with a small vestige of the undesired sideband. This vestige compensates for loss and reduces bandwidth needs compared to DSB. In VSB modulation, the input signal is first used to generate a DSB-SC signal which is then passed through a sideband filter to obtain the VSB signal. This signal is demodulated by multiplying with a carrier and filtering to recover the original input message. VSB is used for television signal transmission due to its efficiency and easy filter design.