This depends on the control panel software you want to use inside your VPS. Image Magic is not installed by default but can be easily added. As for GD it is enabled in Plesk VPS and Webmin VPS by default, with cPanel VPS it can be added in just a couple of clicks in the control panel.
This command should be typed in the root-level ssh session. You may use ssh terminal emulation in VZPP but it is fully compatible only with MS IE 6. If you use Windows, then I would recommend to download and install Putty - the most popular ssh client for MS Windows. You can grab it from: http://www.chiark.greenend.org.uk/~sgtatham/putty/download.html