Can anyone please explain the difference between \"selenium server\" and \"selenium server standalone\" jars and use of both.
Which one to prefer? When to use which
As per Selenium Documents,
You may, or may not, need the Selenium Server, depending on how you intend to use Selenium-WebDriver. If you will be only using the WebDriver API you do not need the Selenium-Server. If your browser and tests will all run on the same machine, and your tests only use the WebDriver API, then you do not need to run the Selenium-Server; WebDriver will run the browser directly.
There are some reasons though to use the Selenium-Server with Selenium-WebDriver.
Here is a photo from the old version of selenium website: