Network Load Balancing is a clustering technology offered by Microsoft as part of all Windows 2000 Server and Windows Server 2003 family operating systems. NLB uses a distributed algorithm to load balance network traffic across a number of hosts, helping to enhance the scalability and availability of mission critical, IP-based services, such as Web, Virtual Private Networking, Streaming Media, Terminal Services, Proxy, etc. It also provides high availability by detecting host failures and automatically redistributing traffic to operational hosts.
A cluster is a group of independent computers that work together to run a common set of applications and provide the image of a single system to the client and application. The computers are physically connected by cables and programmatically connected by cluster software. These connections allow computers to use problem-solving features such as fail over in Server clusters and load balancing in Network Load Balancing (NLB) clusters.