TXMLTransformProvider components always apply updates to the associated XML document. When using TDataSetProvider, however, you can choose how updates are applied. By default, when TDataSetProvider components apply updates and resolve update errors, they communicate directly with the database server using dynamically generated SQL statements. This approach has the advantage that your server application does not need to merge updates twice (first to the dataset, and then to the remote server). 

However, you may not always want to take this approach. For example, you may want to use some of the events on the dataset component. Alternately, the dataset you use may not support the use of SQL statements (for example if you are providing from a TClientDataSet component. 

TDataSetProvider lets you decide whether to apply updates to the database server using SQL or to the source dataset by setting the ResolveToDataSet property. When this property is True, updates are applied to the dataset. When it is False, updates are applied directly to the underlying database server.