I have my VPS account setup recently, as almost VPS provider offer FULL MANAGE service, so in this case, do i need to install firewall on my VPS server?
Presumably you mean a Virtual Private Sever, root on a linux server with an
internet ip address and bandwidth.
If you are paying for managed service then your provider should answer questions like this. Ask them.
If there are no security holes then you don't need a firewall. If you have security holes you should fix the holes. If you are running services that should not be accessable from other machine then turn off the services or configure them to only listen on the localhost interface.
I should add that if you want to go for maximum possible secuirty over the box being easy to use you could add a firewall to block all connection excepts those that are known to be required, eg if the box just runs a webserver you could block all connections except incoming connections to port 80. If someone cracks the box using an exploit for the web server software and you have the server processing running as a none root user they will have trouble spawning a shell on another port, ftping a rootkit into the box and doing other typical activity.
The "everything that is not specifically permitted is forbidden" approach is a pain when you firewall yourself out of the box and can't connect with
ssh. Blocking all outgoing connections will break non passive mode ftp.
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