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I read about temporary tables, global temporary tables and table variables. I understood it but could not imagine a condition when I have to use this. Please elaborate on when I should use the temporary table.
Most common scenario for using temporary tables is from within a stored procedure.
If there is logic inside a stored procedure which involves manipulation of data that cannot be done within a single query, then in such cases, the output of one query / intermediate results can be stored in a temporary table which then participates in further manipulation via joins etc to achieve the final result.
One common scenario in using temporary tables is to store the results of a SELECT INTO statement
The table variable is relatively new (introduced in SQL Server 2005 – as far as i can remember ) can be used instead of the temp table in most cases. Some differences between the two are discussed here
In a lot of cases, especially in OLTP applications, usage of temporary tables within your procedures means that you MAY possibly have business processing logic in your database and might be a consideration for you to re-look your design – especially in case of n tier systems having a separate business layer in their application.