A static IP address is an address that does not modify over time unless changed physically. It is used when you require the IP address or network place to remain the same consistently. A good instance of this is for a web server. If you attend google site you are actually heading for the IP address of 66.102.7.99. If this were to change abruptly you would not be able to obtain to Google unless you recognized the new IP address or until Google modernized their DNS records.

A Dynamic IP address is an address that remains on changing. It is typically used when having a reliable IP address is not necessary. An instance of this would be the IP address your ISP (internet service supplier) allocates you when you log on to the internet. You must have an IP address to browse the web but once you separate you loose that address. Then the next time you sign on you are allocated a new one. This is done using DHCP.