A Service is an application component representing either an application\'s desire to perform a longer-running operation while not interacting with the use
Generally speaking:
Headless Fragments are meant to encapsulate data. Headless fragments are meant to encapsulate data which can be shared between various application components (since they can exist independently of a UI component).
Services are meant to encapsulate processing. They are more independent (and therefore also more heavy-weight, resource wise) than fragments are; they sit at a different level of abstraction and can last longer, in a system.
There is overlap between the two.