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I am at the planning stage of a web application that will be hosted in Azure with ASP.NET for the web site and Silverlight within the site for rich user experience. Should I use Azure Tables or SQL Azure for storing my application data?

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SQL stores relational database whereas Azure Tables stores the non-relational database of massive sizes. 

In terms of scalability, Azure Table is more scalable than Azure SQL.

Talking about Queries, Azure SQL has no limitations but in Azure table, you are restricted to only 1000 queries.

Coming to the cost, Azure tables cost  $0.00036/ 10,000 transactions and around $0.075 per GB/month. 

For detailed Azure SQL pricing, click here.

It is easy to work with SQL Azure if you already have experience working in a relational database. Otherwise, if your budget is low, then migrate to Azure SQL.

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