Difference between datetime and timestamp in sqlserver?

Datetime is a datatype.

Timestamp is a method for row versioning. In fact, in sql server 2008 this column type was renamed (i.e. timestamp is deprecated) to rowversion. It basically means that every time a row is changed, this value is increased. This is done with a database counter which automatically increase for every inserted or updated row.

For more information:

http://www.sqlteam.com/article/timestamps-vs-datetime-data-types

http://msdn.microsoft.com/en-us/library/ms182776.aspx

According to the documentation, timestamp is a synonym for rowversion - it's automatically generated and guaranteed¹ to be unique. datetime isn't - it's just a data type which handles dates and times, and can be client-specified on insert etc.

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¹ Assuming you use it properly, of course. See comments.