Server.Transfer is used to post a form to another page.
Response.Redirect is used to redirect the user to another
page or site.

Both r used to redirect webform
Server.Transfer  fetches page from Server .. while
it will take time..

response.redirect directly open described page..

Nitya u r wrong , in server.transfer is reliable then
response.redirect ,server.transfer will not create any
cookie and it will take u on the requested page directly and
taking less time then response.redirect.

Server.Tranfer direct shows requested page without any 
server side roundtrip.
But response.redirect it round trip to server then shows 
requested website or page.

Response.Redirect sends message to the browser saying it to 
move to some
different page, while server.transfer does not send any 
message to the browser
but rather redirects the user directly from the server 
itself. So in server.transfer
there is no round trip while response.redirect has a round 
trip and hence puts
a load on server.
Using Server.Transfer you can not redirect to a different 
from the server itself.
Example if your server is www.yahoo.com you can not use 
server.transfer to move
to www.microsoft.com but yes you can move to 
www.yahoo.com/travels, i.e.
within websites. This cross server redirect is possible 
only using
Response.redirect.
 With server.transfer you can preserve your information. It 
has a parameter
called as “preserveForm”. So the existing query string etc. 
will be able in the
calling page.

Incase of Server.Transfer ,it doesnot cause rod trip to 
client and also it does not store url history and directly 
redirect to the requested page without changing URL(Please 
note).It transfer from Server itself.

where as in case of Response.redirect it cause round trip 
to client browser and then transfer from page which cause 
request to redirected page.