95.45% Disk Inodes

just looked at my vzpp and realize that i have used 95.45% of the Disk Inodes. so my questions are:
what is disk inodes?
how to increase the space?
what happen if it reach 100% usage? server failure?

Inodes are the number of files that you have as opposed to the amount of space you are using. Its important because as far as the system goes it takes more processing power to have 100 1KB files than 1 100KB file.
On the other questions I can't speak on behalf of KH but my guess is move to bigger plan and they will let you know whenever you reach some limit and they will work with you so that others on your node (server) are not put at an disadvantage.