Virtual machine port groups provide networking for virtual machines. They are a networking concept in a vSphere environment.
See the Networking Concepts Overview.
A VLAN is a distinct broadcast domain on a layer-2 network. Network traffic over 2 different VLANs is isolated from each other. Communication between different VLANs can only be done over 1 or more routers.
You can find a good overview of these concepts in VMware Networking Best Practices, a document written by Jeff Hunter.