The connectivity diagram below should aid in understanding of its interaction and why user X (the VirtualBox user that administers your VirtualBox installation) must be properly configured.

  -----------------------------------------------------
  | Web Server                                        |
  |    phpVirtualBox (config.php contains user X's    |
  |     |              system username / password)    |
  ------|----------------------------------------------
        |
    Authentication and VirtualBox communication
        |
        |  -----------------------------------------------
        |  | VirtualBox Installation                     |
        |  |                                             |
        '---- vboxwebsrv (running as user X)             |
           |    |                                        |
           |    '--- User X's VirtualBox configuration   |
           |         and virtual machines                |
           |                                             |
           -----------------------------------------------
 

Note that although the web server and VirtualBox installation are in 2 different boxes in the diagram, they certainly may run on the same physical host. Taking security considerations in mind, they probably should run on the same host.