There are multiple blog posts that describe the technical differences between Outlook Synchronization and Server-Side Synchronization, but what are the primary differences in the user experience?

1. User can use folder based tracking.
2. If using CRM online, users can use the new lightweight app.
3. Activities will sync without Outlook running.
4. Tracking/synching takes place in the background, so there is a delay between when the track button is pushed and the item appears tracked in Outlook and the “view in CRM” button becomes available.
5. Users with multiple computers can track and sync items from multiple computers, instead of the single synchronizing client limitation of Outlook synchronization.
6. Server side synchronization makes items tracked on your calendar by a delegate (like an administrative assistant) track immediately. With Outlook synchronization, items I track on other people’s calendars do not track or synchronize until the user opens Outlook.
7. Users of server-side-synchronization can share the same mailbox between multiple users and have them track items (think a shared support mailbox scenario). Users of Outlook synchronization can only track items in one mailbox from a single computer.

My recommendation:

If users only exclusively use Outlook for business email (never sends or receives business related email via phone or mobile device) and always work with the same computer, use Outlook synchronization

If users split their time between multiple computers, don’t exclusively use Outlook, or regularly send or receive business related emails from a smartphone or mobile device, use server side synchronization.

Remember, you don’t have to have all users on Outlook sync or server-side synchronization. You can use the setting that is appropriate for the user scenario.