DataReader:
Datareader is like a forward only recordset. It fetches one row at a time so very less Network Cost compare to DataSet(Fetches all the rows at a time). DataReader is readonly so we cannot do any transaction on them. DataReader will be the best choice where we need to show the data to the user which requires no transaction i.e reports. Due to DataReader is forward only we cannot fetch the data randomly. .NET Dataproviders optimizes the datareaders to handle the huge AMOUNT of data.

DataSet:
DataSet is always a BULKY object that requires lot of memory SPACE compare to DataReader. We can say the dataset as a small database because it stores the schema and data in the application memory area. DataSet fetches all data from the datasource at a time to its memory area. So we can traverse through the object to get required data like querying database.The dataset maintains the relationships among the datatables insideit. We can manipulate the realational data as XML using dataset.We can do transactions (insert/update/delete) on them and finally the modifications can be updated to the actual database. This provides impressive FLEXIBILITY to the application but with the cost of memory space. DataSet maintains the original data and the modified data seperately which requires more memory space. If the amount of data in the dataset is huge then it will reduce the APPLICATIONS performance dramatically.

DataReader:
Datareader is like a forward only recordset. It fetches one row at a time so very less Network Cost compare to DataSet(Fetches all the rows at a time). DataReader is readonly so we cannot do any transaction on them. DataReader will be the best choice where we need to show the data to the user which requires no transaction i.e reports. Due to DataReader is forward only we cannot fetch the data randomly. .NET Dataproviders optimizes the datareaders to handle the huge amount of data.

DataSet:
DataSet is always a bulky object that requires lot of memory space compare to DataReader. We can say the dataset as a small database because it stores the schema and data in the application memory area. DataSet fetches all data from the datasource at a time to its memory area. So we can traverse through the object to get required data like querying database.The dataset maintains the relationships among the datatables insideit. We can manipulate the realational data as XML using dataset.We can do transactions (insert/update/delete) on them and finally the modifications can be updated to the actual database. This provides impressive flexibility to the application but with the cost of memory space. DataSet maintains the original data and the modified data seperately which requires more memory space. If the amount of data in the dataset is huge then it will reduce the applications performance dramatically.