What are the differences between basic and dynamic disks?

Answer:

In Windows Server 2008, a basic disk is the same type of disk as found in earlier versions of Windows. When using MBR, basic disks gave you either four primary partitions or three primary partitions and one extended partition. The partition table and master boot record are located on the first sector of each hard disk.

Dynamic disks were created for increased flexibility. Instead of the basic partition table found in a basic disk, a dynamic disk uses the Logical Disk Manager (LDR) database to store information about the basic disk. Because it uses the LRD, the disk can be divided into 2,000 separate volumes. However, you should limit the number of volumes to 32 to allow the system to reboot in a reasonable amount of time.