From: http://www.swtor.com/info/newplayerguide/chapter-two
ENTERING THE GALAXY...
Before you begin your journey in Star Wars™: The Old Republic™, you’ll need to decide what type of environment is best-suited to your playstyle and what type of character you want to play. In this section, we’ll guide you through the process of selecting your server, as well as walk you through the process of creating a your first character.
Selecting a Server
In Star Wars™: The Old Republic™, you will choose one of four types of game servers to play on. Different players have different preferences; some prefer a competitive environment while others prefer an atmosphere where they can focus entirely on personal and group missions. For some players, the most important aspect of the gameplay setting is that everyone respects a high level of immersion by staying in character when they communicate in the game. You can find out what type of environment each server is by looking at the item marked as "type" next to each server’s name.
While people with experience playing Massively Multiplayer titles will immediately know what each of these different environment types are, those of you who are new to the genre may have questions about the available options. A short description of each of the four different server types below should give you a better understanding:
Player vs. Environment (PvE) - In Star Wars™: The Old Republic™, Player vs. Environment servers serve as the "default." On these servers, you have the option to role-play as your character, and player- vs.- player fights must be agreed to by both sides.
Player vs. Player (PvP) - On a Player vs. Player server, players from the opposing faction can attack you at almost any time. Of course this means that you can also attack them at almost any time. This provides you with a more challenging experience since you are under the near-constant threat of attack, both from NPCs and from players aligned with the enemy faction.
Role-Playing (RP-PvE or RP-PvP) - Role-Play-specific servers are for those of you who want to take your role-playing experience to the next level and create your own persona in the Star Wars galaxy. Role-Playing servers are available as either Player vs. Environment or Player vs. Player, except on these servers players remain in-character at all times to provide a more immersive experience.