It is extremely important to understand the difference between packet switched and circuit
switched systems, a difference, which is illustrated here.
You can compare a circuit switched data to a train and the physical medium is the train line.
Before the train (data) can use the line it has to ask and be granted access. Once this is done
the train can then proceed on the line, but it has exclusive access to the line. No other trains can use the line while our train is there. In a data communications environment,
circuit switchings main drawbacks are the call setup overhead (that is, asking for and being
granted access to the line) and the low utilization of the physical medium (only one train at a time). One advantage of circuit switching is that the call setup procedure allows users to be allocated and guaranteed a certain bandwidth. A good example of circuit switching is the analogue telephone network. Before you can talk to anyone you have to dial their number (a call request). The call is physically switched through the network until you had an end-toend circuit between your telephone and the telephone you are calling. Only when the phone is answered at the other end (a call accept) can communication begin.
What about packet switching? Well, in this case our data can be imagined as cars and the physical medium as a motorway.
Instead of sending one big chunk of data, like we did with a circuit switched train, we send smaller chunks of data, with many users on the same channel simultaneously. The advantage with this is that we don't need any call set-up procedure, we just jump in the car and go. Packet switching also gives a much higher channel utilization, because many people can use the same motorway simultaneously.
The disadvantage is that because we have no way of knowing how much data other users are
going to send there is no guarantee of bandwidth if too many people try to use the motorway at the same time it will slow down and eventually stop. The best example of a packet switched network is the global Internet.