What is the difference between ResponseEntity<T> and @ResponseBody?

ResponseEntity will give you some added flexibility in defining arbitrary HTTP response headers. See the 4th constructor here:

http://docs.spring.io/spring/docs/3.0.x/api/org/springframework/http/ResponseEntity.html

ResponseEntity(T body, MultiValueMap<String,String> headers, HttpStatus statusCode) 

A List of possible HTTP response headers is available here:

http://en.wikipedia.org/wiki/List_of_HTTP_header_fields#Responses

Some commonly-used ones are Status, Content-Type and Cache-Control.

If you don't need that, using @ResponseBody will be a tiny bit more concise.

HttpEntity represents an HTTP request or response consists of headers and body.

// Only talks about body & headers, but doesn't talk about status code
public HttpEntity(T body, MultiValueMap<String,String> headers)

ResponseEntity extends HttpEntity but also adds a Http status code.

// i.e ResponseEntity = HttpEntity + StatusCode
public ResponseEntity(T body, MultiValueMap<String,String> headers, HttpStatus statusCode)

Hence used to fully configure the HTTP response.

For Ex:

@ControllerAdvice 
public class JavaWebExeptionHandler {

    @Autowired
    ExceptionErrorCodeMap exceptionErrorCodeMap;

    @ExceptionHandler(RuntimeException.class)
    public final ResponseEntity<ExceptionResponseBody> handleAllExceptions(Exception ex) {
        Integer expCode = exceptionErrorCodeMap.getExpCode(ex.getClass());
        // We have not added headers to response here, If you want you can add by using respective constructor
        return new ResponseEntity<ExceptionResponseBody>(new ExceptionResponseBody(expCode, ex.getMessage()),
                HttpStatus.valueOf(expCode));
    }

}

@ResponseBody indicates that return value of method on which it is used is bound to the response body (Mean the return value of method is treated as Http response body)