From operating system point of view there is no difference between physical and virtual processor. But conceptually both of these are different.
The physical processor is physical entity.
Virtual Processor is logical entity. The physical processor is divided into processing units. And one or several processing units are combined together to make virtual processor. The processing capacity is distributed in terms of virtual processors and not as processing units.
For example, if we have 2.0 physical processors and we take 0.4 processing units as one virtual processor. This will leave shared pool with 5 virtual processors.
If the processing units required for a partition are 1.2 then 3 virtual processors will be allocated for that partition.
If the processing units required for a partition are 1.7 then 5 virtual processors will be allocated for that partition.
That means the number of virtual processors is rounded to the next higher level.