Giving the V sign often has a different meaning to giving the middle finger.

In Ireland, the V sign is often used as a greeting among close friends, or a general response to a minor insult. When used towards people who aren't used to this practice, it is necessary to quickly explain the difference between this and "the bird" before you get a smack in the teeth. The explanation I usually use seems to protect me (most times) from general body-directed harm.

Put basically, the middle finger is an insult, the V sign is a taunt. Imagine you are driving a car and a guy stops really hard in front of you. You scream "SHIT!!" and slam on the brakes, holding up your middle finger to show your anger. Then you see you've just smacked off the car behind you, so you take off fast, giving the driver behind a hearty V sign while laughing insanely. "HA HAA HA HAAA" you say.