Difference between Selenium RC and WebDriver

Quoting from WebDriver and Selenium RC:

Selenium-WebDriver makes direct calls to the browser using each browser’s native support for automation. How these direct calls are made, and the features they support depends on the browser you are using. Information on each ‘browser driver’ is provided later in this chapter.

For those familiar with Selenium-RC, this is quite different from what you are used to. Selenium-RC worked the same way for each supported browser. It ‘injected’ javascript functions into the browser when the browser was loaded and then used its javascript to drive the AUT within the browser. WebDriver does not use this technique. Again, it drives the browser directly using the browser’s built in support for automation.

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.

• You are using Selenium-Grid to distribute your tests over multiple machines or virtual machines (VMs).
• You want to connect to a remote machine that has a particular browser version that is not on your current machine.
• You are not using the Java bindings (i.e. Python, C#, or Ruby) and would like to use HtmlUnit Driver.

Selenium RC injects javascript function into browsers when the web page is loaded.

Selenium WebDriver drives the browser using browser's built-in support.

Wanted to add a point to the answers above,

As selenium RC is injecting java script code to browsers , the browsers act almost similar manner

But for WebDriver the calls are made directly using particular browser's native support ,the browsers behave more like in case of user interactions