by 
The Curious Bag
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The conundrum of camshaft selection once relegated all engines to being either low-powered fuel-sippers or all-out race engines. This was a dilemma Honda solved some time ago with its seminal VTEC (Variable Timing and Electronic Control) system--the official name of the system.
VTEC History
VTEC was first used on Honda's CBR400 motorcycle in 1983, and its first use on a car was the 1990 Acura NSX supercar. It is now used on every automotive engine in the Honda line.
Airflow
An engine uses a set of valves actuated by a camshaft to let air in and out. The distance these valves open (lift) and how long they stay that way (duration) determine an engine's power-band and output.
Camshaft Effects
A camshaft with a lot of lift and duration is great for high-end horsepower, but makes the idle choppy and hurts fuel economy.
VTEC Function
A VTEC system has two sets of camshafts; one for low RPM fuel economy and another for high-end horsepower. The engine uses oil pressure to activate to race camshaft at high-RPM for more power.
Variations
Almost every manufacturer now has some variation of Honda's VTEC, including Toyota (VVTL-i), Mitsubishi (MIVEC) and Nissan (VVL).
Source:
Hondatuningmagazine.com: VTEC Head Swap
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