Switchgear

http://en.wikipedia.org/wiki/Contactor

http://en.wikipedia.org/wiki/Relay

Contactor switches POWER, relay switches CONTROL. At the low end, there is not much of a difference and you can almost always use a small contactor as a relay, but not always vice versa.

In PLC wheather we are using relay/contactor or both . Can u give some example for this

The two posts refer to a "Contactor relay" or "Control relay". In IEC regions, the word "Relay" also encompasses protective relays... like thermal overload relay, buchholz relay, reverse power relay and so on and so forth.

However, since the OP is asking for relays and contactors, the two main meanings are likely to be "control relay as already mentioned by the others, and the thermal overload relay and the electronic motor protection relay.

In my expirence. The difference is simply, high and low current (high for contactors, low for relays). That is based in their internal components, the relay is very simple, a device that changes the states of its leads, N.O. to close, and N.C to open And no more!.

Switching leads causes Electric arcs. Do u have seen a spark?... one of the reason of sparks are Electric arcs, the arc is energy that flows through the air between two leads with high potential difference (voltage). The contactors (with the same relay function, switch its leads) have been gifted with components capables of supress the arc in high voltages (this arc is capable of lock the close state of a relay, or in higher voltage, melt together the leads of a relay)

This is a poor explanation, but it's a important point that I can aport. Keep searching for more info.