Consider the two following examples to answer your question:
Example of circuit-switching: You pick up your land phone and dial your friend. At that point, the telco provider creates a dedicated circuit for that session and connects you to your friend's telephone. No matter how long you keep the line open with your friend, the circuit will remain, and packets flowing between both telephones will always follow the same path. This is an example of a circuit-switched network.
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Example of packet-switching: In the second example, you switch on your PC and connect to your favorite site that offers a number of applications you can download from, so you begin downloading one application at a time. Each packet has to find its own route to the destination, i.e., your computer. Each packet finds its way using the information it carries, such as the source and destination IP address. If network congestion occurs, the routers responsible for routing packets between networks will automatically select different paths to ensure data is transferred as required. This is an example of a packet-switched network.
For more information, view Lindi Horton's response to the question "What is the difference between circuit switching and packet switching?" or visit SearchNetworking.com's FAQ guide.
This was first published in February 2009