Most modern Wide Area Network (WAN) protocols, including TCP/IP, X.25, and Frame Relay, are based on packet-switching technologies. In contrast, normal telephone service is based on a circuit-switching technology, in which a dedicated line is allocated for transmission between two parties. Circuit-switching is ideal when data must be transmitted quickly and must arrive in the same order in which it's sent. This is the case with most real-time data, such as live audio and video. Packet switching is more efficient and robust for data that can withstand some delays in transmission, such as e-mail messages and Web pages.
A new technology, ATM, attempts to combine the best of both worlds -- the guaranteed delivery of circuit-switched networks and the robustness and efficiency of packet-switching networks.
Source:www.webopedia.com/TERM/p/packet_switching.html
