Web References: -
This is old style. It is
deprecated asp.net web service (ASMX) technology. It allows communicating with
any service based on any technology that implement the WS-I Basic profile 1.1,
and exposes the relevant metadata as WSDL.
Service References :- It is new way of doing it, adding
a WCF Service reference, which give you more advance, more flexible service
model than plain old ASMX.
It allows communicating with any service based on
any technology that implements any of the many protocol supported by WCF (not
limited to WS-I Basic profile 1.1).
See below fig:-