Difference between Web User Controls and Web Custom Controls in ASP.Net.

Why?

If none of the existing ASP.NET server controls meet the specific requirements of your applications, you can create either a Web user control or a Web custom control that encapsulates the functionality you need. The main difference between the two controls lies in ease of creation vs. ease of use at design time.

Web User Control:

Web user controls are easy to make, but they can be less convenient to use in advanced scenarios. You develop Web user controls almost exactly the same way that you develop Web Forms pages. Like Web Forms, user controls can be created in the visual designer, they can be written with code separated from the HTML, and they can handle execution events. However, because Web user controls are compiled dynamically at run time they cannot be added to the Toolbox, and they are represented by a simple placeholder glyph when added to a page. This makes Web user controls harder to use if you are accustomed to full Visual Studio .NET design-time support, including the Properties window and Design view previews. Also, the only way to share the user control between applications is to put a separate copy in each application, which takes more maintenance if you make changes to the control.

Web Custom Control:

Web custom controls are compiled code, which makes them easier to use but more difficult to create; Web custom controls must be authored in code. Once you have created the control, however, you can add it to the Toolbox and display it in a visual designer with full Properties window support and all the other design-time features of ASP.NET server controls. In addition, you can install a single copy of the Web custom control in the global assembly cache and share it between applications, which makes maintenance easier.

If your control has a lot of static layout, a user control might make sense. If your control is mostly dynamically generated — for instance rows of a data-bound table, nodes of a tree view, or tabs of a tab control — a custom control would be a better choice.

The main differences between the two types are outlined in this table:

Source: MSDN