- Standalone will install SQL Express on your machine and use it for your Sharepoint instance. No other SP machines can join, its standalone not a farm.
- Farm will install Sharepoint on existing SQL Server instance if you already have one on either your machine or somewhere else on the network. You can join other machines to this SP installation.ore
More details I found on a site:
When installing SharePoint Server 2010, there are primarily three setup options. Following is a short description of each type of installation:
Standalone Installation :
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SQL Server 2008 Express Edition is the database type automatically installed (instead of Windows Internal Database/SQL Server 2005 Embedded Edition used in Windows SharePoint Services 3.0).
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This is almost a “one-click” installation, no questions are asked during setup or during Post Setup Configuration Wizard (PSConfig)
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A Web application and team site collection are automatically created in the newly created farm. The search service is started automatically.
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Cannot add servers to join a farm.
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When the installation is complete, the browser opens taking you to a newly created site collection.
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Installer is not prompted for farm passphrase, it is automatically generated.
Server Farm Standalone
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Same as Basic installation, except it allows changing installation directory location.
Server Farm Complete
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SQL Server 2005 SP2/SQL Server 2008 is the database type, not installed by setup.
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Administrator can pick whether or not to create a site and the site template to use.
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Prompted for farm passphrase during PSConfig phase of installation.
