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In Server 2008 R2 you can create a cluster of computers, which as I understand provides fail-over if a server dies. With Network load balancing I beleive this "offloads" some of the load to other servers, for example you could have two web servers with NLB...but couldn't you also have a cluster and NLB on the cluster as well?

Basically, where to use NLB and where to use clustering, for example, a database and a website.

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NLB is best used in cases where replicating the data needed by a service is a trivial task, multiple servers may run the service simultaneously with no harm, and any changed data is passed through to another service completely. Most webservers.

Clustering is best used in cases where shared storage is in use and only one service may run at a time for data-integrity or other reasons. Most databases.

You use NLB to create a group of identically configured web-app servers, all of whom talk to a clustered Database server.

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I think of it as keeping an eye on the problem that is primarily being solved. Clustering primarily gives you improved availability of a particular application by improving the platform it's running on.

NLB allows you to group together a series of resources to primarily improve performance, by allowing you to hide several resources behind one network address, and this may also help with availability depending on the task in hand.

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