VPNs were originally designed to serve institutions with firewalls. The ‘provider’ above was a computer within the firewall and the program V ran on a machine used by an employee when he was outside that firewall. The employee thus had internal access but limited by the firewall.
If some eavesdropper examines the traffic from your machine he sees encrypted traffic to and from the VPN provider. He sees packet sizes and timing. If he has global reach he may correlate this traffic with the traffic between the provider and the recipient. This is harder than it seems especially if the provider inserts some random delay before forwarding.
The VPN provider will be of special interest to various intelligence agencies. I believe it is technically feasible to provide this service securely, but it is a challenge.
EPIC recommends some VPN providers.