Static readonly versus constants

Though both would appear similar – they are both read only and generate almost similar IL code – they have a number of differences.  Here they are:

Constants are evaluated at compile time, whereas static (or static readonly) variables at runtime.

So, when the compiler generates the IL, the value of the constant is burned into the IL wherever it is referenced.  Consequently, when you change the value of a constant, all the client applications referring the constant will have to be recompiled.

However, if you change the value of a static field, you only need to recompile that library and none of the clients.  This is because the IL generated would only be referencing the static field, and will not have the value burned into it.

Though constants and readonly variables are both read only, readonly is a runtime constant, and can hold references types (like DataSet etc.).  Constants on the other hand cannot hold reference types except for string and null.

Yet another difference is that constants need to be initialized at the declaration itself, whereas readonly fields may be initialized either at the declaration or in a constructor (or in static constructors/type initializers).

From: http://msmvps.com/blogs/rakeshrajan/archive/2005/05/01/45260.aspx