Dielectric meant in the sense of "something obstructing the path" and obsuring what's underneath.
VLF signals are absorbed less by the ground, especially if it is moist. As the water content increases, so does the absorbtion of the signal and hence the range it can reach for a given power. For some applications, for example ground penetrating radar, higher frequencies are used but the power levels are relatively high and the shorter wavelengths make it easier to use directional antennas. They work on a different principle though, one that is complicated and not really suited to metal detection.
Brian.