data set a  collection of datatables and we can edit the 
data in the datatables and the same can be persisted to 
databae using adapter in the disconnected maner by using 
commandbuilder or insert,update,select command.

datareader is just the container for data,its readonly and 
forwardonly curosr.this follows connected architecture,that 
means when we are reading data from datareader at that time 
connection should be kept open.

data reader can hold data from multiple tables and 
datareader can hold more than one table.

Example:

string query="select * from employee;select * from student";
sqlcommand cmd=new sqlcommand(query,connection);
sqldatareader dr=cmd.executeReader();
if(dr.hasrows)
{
dr.read();
gridview1.DataSource=dr;
gridview1.Databind();
if(dr.nextresult)
{
gridview2.datasource=dr;
gridview2.databind();
}
}
dr'colse();
connection.close();

if anybody have any doubts,mail to me on karun84@gmail.com

DataSet is a disconnected object and holds the data from 
datastore. It can hold the data of more than one table.

   where as dataReader is connected architecture which can 
rbe used to read the data from the dataset in forward only 
fashion. DataReader cannot hold multiple tables of data.