The answer here doesn't seem to actually answer the posted question. "SQL Server 2008 Server Project" "SQL Server 2008 Database Project" are both things that exist in Visual Studio 2008 Database Edition, but sadly while there isn't one named "SQL Server 2008 Project" as the answer suggests, there is one "SQL Server Project" that matches the description. Moreover, there isn't a project type anymore called "SQL Server Database Project" (at least not in Visual Studio 2008 Team Suite), although the description given above seems to describe the much older database projects that were at one point available in VS.
After thinking about it further, I'm going to guess that marc_s doesn't have the Database Edition (otherwise known as Data Dude or DBPro) installed. Correct me if I'm wrong.
Sql Server 2008 Database Projects and Sql Server 2008 Server Projects seem to do basically the same thing. I would have hoped that the Server projects would be used for the installation and configuration, and change management of a Sql Server instance, while Database Projects would be used for individual databases inside them...but this doesn't seem to be the case. Has anyone actually been able to determine the differences between them?
After playing around for a bit, the only difference I've been able to find is that Sql Server 2008 Server Projects will always deploy to the master database on the server you deploy to, regardless of what kind of database you import (master or otherwise) when you create the project. So in that case, Database Projects are for your business databases while Server Projects are specifically for the master database on the server that houses your business databases.
Edit: After scouring the VS2008 documentation a little harder, I came across this specification:
"Deploying Server Projects
A database project can contain definitions for database objects, for server objects, or for both. In most environments, developers can change database objects, but only the database administrator can change server objects. You can enforce this restriction by putting server objects in a separate project (known as a server project). You can then restrict version control so that only your administrators can change the server project. In a staging or production environment, the server project and its objects will most often be deployed separately from the project that contains the database objects.
You deploy a server project by using the same procedures that you use to deploy a schema project."
http://msdn.microsoft.com/en-us/library/dd193413.aspx