VBW stands for Video Bandwidth; helps improve resolution of very weak signals in the presence of the noise signal. It is post detection filter bandwidth which just smooths out signal of interest.
When a small signal included in noise is measured, this effect is demonstrated.
As one can see that signal is clear from noise when VBW is decreased from 100 KHz to 300 Hz.
VBW is associated with video filter. The position of video filter is after envelope detector and just before displaying the signal on the screen display.
A noisy signal can be removed by lowering the VBW. However, the signal disappears if VBW is lowered too much when measuring a pulsed signal.
Difference in RBW and VBW
RBW reduces the noise floor and on the other hand VBW does not reduces the noise floor, it just reduces the noise on the trace. Means VBW cleans the signal out of noise.