In Java, when should I prefer String over StringBuilder vice versa?

You should use String, because String objects are cached in an object pool and might deliver better performance when you don't change them.

A StringBuilder is only useful when you keep on concatenating String tokens, which shouldn't be the case in a well normalized database table.

The JVM does all sorts of optimizations and chances are that even if you use concatenation the JVM might rewrite that routine to a StringBuilder version.

I'd use String for text values that are fixed.

Use StringBuilder when you are creating a larger text String like:

final StringBuilder sb = new StringBuilder();
for(;;){
    sb.append("more text\n");//add text, StringBuilder's size will increase incrementally
    if(this.stop()){
         break;//stop loop
    }
}
final String result = sb.toString();// Create the final result to work with
System.out.println(result);//print result

Use StringBuffer instead of StringBuilder for synchronized values, see https://stackoverflow.com/a/355092/928952 for difference between StringBuilder and StringBuffer.

JavaDoc: StringBuffer (http://docs.oracle.com/javase/7/docs/api/java/lang/StringBuffer.html):

A thread-safe, mutable sequence of characters. A string buffer is like a String, but can be modified. At any point in time it contains some particular sequence of characters, but the length and content of the sequence can be changed through certain method calls

JavaDoc: StringBuilder (http://docs.oracle.com/javase/7/docs/api/java/lang/StringBuilder.html):

A mutable sequence of characters. This class provides an API compatible with StringBuffer, but with no guarantee of synchronization. This class is designed for use as a drop-in replacement for StringBuffer in places where the string buffer was being used by a single thread (as is generally the case). Where possible, it is recommended that this class be used in preference to StringBuffer as it will be faster under most implementations.

JavaDoc: String (http://docs.oracle.com/javase/7/docs/api/java/lang/String.html):

The String class represents character strings. All string literals in Java programs, such as "abc", are implemented as instances of this class. Strings are constant; their values cannot be changed after they are created. String buffers support mutable strings. Because String objects are immutable they can be shared

Basically you'll use String for constants (immutable) of text.

A simple rule of thumb (String is a type that represents character strings. StringBuilder a stream of mutable characters)

Use String to represent text values. By definition Java provides pooling of string values and thus providing you some space optimization. Think of this in a scenario where your application is dealing with millions of text values during a file batch processing. So as an example.

  String str1 = "Test";
  String str2 = "Test";

Here, str1 == str2 ( same reference)

Also, + operator is overloaded in String to construct String from different types. This can be used when constructing small Strings ( internally it gets done using StringBuilder so no worries) - but not while looping.

Use StringBuilder(or old counterpart StringBuffer) only when you are constructing a target String using small pieces of different types - and especially inside a loop - this will help you to avoid placing unnecessary string fragments in the string pool.

   StringBuilder s1 = new StringBuilder("test");
   StringBuilder s2 = new StringBuilder("test");

Here, s1 != s2

Also, I do not think there is someway you can manipulate the encoding of StringBuilder/Buffer - Meanwhile String allows this.

Edit: Representing Hibernate entities : Always use String to represent a text type in your class. For reasons stated above.This should come to you like muscle memory. For example, int, float, char etc for primitive types and String for text type. Use the builder only to build strings and not to represent a type unless that is some strange requirement.