This is a question I get *a lot*. I’ll tell you the difference and then recommend a preferred option and explain why.

Windows implemented sleep and hibernation modes as a power saving measure and a convenience. When you perform a normal shutdown in Windows, you have to boot from scratch and it takes a while to get programs up and running like they were the last time you used the computer. This is where sleep and hibernation come in.

Sleep

“Sleep is a power-saving state. Sleep saves all open documents and programs, and allows the computer to quickly resume full-power operation typically within several seconds) when you want to start working
again. Putting your computer to sleep is like pausing a DVD player: the computer immediately stops what it’s doing and is ready to start again when you want to resume working.”

Sleep saves all your open programs into RAM. The computer uses a small amount of power to maintain this info in RAM. For this reason, it is not advised to use sleep mode when you are running a laptop on battery power only.

Hibernation

Hibernation is exactly like sleep mode except that it saves all of your information to disk instead of RAM. When the computer is resumed from hibernation, the info is read from the disk instead of the RAM. For this reason, it’s better to use hibernation when you are running on only battery power. Also, since hibernation writes to the disk, which is much slower than RAM, it takes longer to shut down.

As of Windows Vista, there is another option called hybrid sleep. It writes to both RAM and the hard disk. This gives more assurance that your data will still be there when you resume next time, but it also takes longer to shut down because of the double writing.

Suggestions

If the hybrid hibernation mode is available to you, I would suggest using it. Here’s how to access it. Go to Start>Control Panel>Power Options>Change plan settings (for whatever plan you are using)>Change advanced power settings then click on the plus sign next to Sleep and then the plus sign next to “Allow hybrid sleep”. Here you can toggle the setting on or off. While you are here, you might want to look at some of the other settings. You can change the behavior for closing the lid or pressing the power button. Again, I recommend hybrid sleep or hibernation.