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Server 2008 Terminal Services Explained

Terminal Services allows consolidation and standardization of desktop applications or entire desktop. Terminal Services also allows enterprise applications to be made available from any location with an internet connection. In many cases, Terminal services can reduce total cost of ownership when deploying business applications to end users. This eliminates the need for installation of the application on every end user workstation. In a nutshell, Terminal Services allow users to access high performance applications in heterogeneous environments.  It supports underpowered hardware, non-windows OS, terminals and thin clients to run as Terminal services clients.

Users utilize mstsc.exe (Remote Desktop Connection Client), RDC to connect to a Terminal Server to access applications. RDC uses Remote Desktop Protocol (RDP) to connect to terminal server on port TCP 3389. RDC Client keyboard and mouse events are redirected to Terminal Server via Remote Desktop Protocol. Terminal Sever then renders and redirects back display to RDC Client.

Terminal Services modes

Remote Desktop Mode
Remote Desktop mode allows only two users to connect to a server at one time. Remote Desktop Mode can be enabled by going to System Properties > Remote tab. The main purpose of Remote Desktop Mode is to allow remote administration of Server 2008. It has no intentions to use as Terminal Server as described above.

Terminal Server Mode
As mentioned above, Terminal Server mode allows consolidation and standardization of desktop applications. Terminal Server mode allows multiple users to connect and run an application or entire desktop. This mode requires the purchase of a Terminal Server client access license (CAL) for each user or session.

Terminal Service Client
Most Windows operating systems—Windows 2000, 2003, XP and Vista include a Remote Desktop Connection (RDC) client. This allows users to connect to a Terminal Server without installing extra application.