Workstation is a user-mode program. It runs while you are logged on, and it won't run when you are logged off. So, it isn't well suited to long-running applications. It isn't appropriate (or even allowed by the licensing) to run Web or application servers in a Workstation session. By comparison, Server runs as a service independent of any particular user login. You connect a client GUI to a running session as required, and you can connect to sessions on remote Server machines as well.
If, like me, you run VMware on a laptop, you face the issue of what happens to your VMware sessions when the host's battery runs out of power, and the host wants to shut down. Neither Workstation nor Server does a perfect job of shutting down the guest sessions cleanly before the host shuts down, not in my experience, but Server definitely does a better job.
Workstation is a more appropriate choice if you are doing software testing primarily. In particular, you can create snapshots of your system as you are testing, and then revert to any of those snapshots as required. That can be a lot faster than having to do a from-scratch system setups for each part of your testing.
So, in summary, VMware Workstation is better for software testing, VMware Server is the choice for actually doing real work. As a postscript, note that VMware Server is currently still in beta. It has a lot of debugging code enabled, and it runs much more slowly than Workstation or its predecessor, GSX. This is particularly the case for anything that requires a lot of disk access, and those are the times when I wonder if I really wanted to be such an early adopter. If it's a problem for you too, wait until there is a post-beta version of VMware Server. Otherwise, VMware Server is just as brilliant as VMware Workstation, and Server is definitely the choice for what I want, running virtual sessions in which I do my real work, not tied to a particular physical PC.
Then there is VMware ESX, which plays the role of operating system as well. It doesn't require Linux nor Windows as a host operating system, and it's the one to choose for big multi-processor systems where you want the horsepower to be available on demand across many VMware sessions. It's a level beyond what I want for my systems now, but I like the idea of virtualisation right down at the host OS level. If I could buy my desktop/deskside PCs or laptops like that, I would do so without hesitation.
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