The size of your network will ultimately determine whether you choose a Domain environment or a Workgroup one. In a workgroup environment each user has his or her own account on one computer. If they wish to use a different computer then an account must be set up for them on that computer. This is typically used in a small office where people do not move around a lot. You have the ability to share devices like printers and files and folders. Security is quite a bit more relaxed. A server is not required. All that is required for network communications is that all computers have the same Workgroup name.
A domain on the other hand has more centralized control. At least one server is required with two being a better idea. A user can log on to any computer within the domain without accounts having to be set up on every computer. Server based applications can be installed so that all workstations can access them. You still have the ability to share printers, files and folders with much more enhanced security features. We typically see this environment in enterprise situations with 10 or more computer but it can be done on a smaller scale as well.
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