Try typing the command:
java -version
It will print something like this:
java version "1.6.0_29"
Java(TM) SE Runtime Environment (build 1.6.0_29-b11)
Java HotSpot(TM) Client VM (build 20.4-b02, mixed mode, sharing)
The difference between the client and server VM is in how certain VM parameters are tuned. The client VM is tuned so that programs start up quicker (because that's what users of desktop applications and
applets in the browser expect). The server VM might start up a little slower, but performs more optimizations on the program early on, so that the program might run a little bit faster. It's tuned for long-running processes, typical for what happens on a server.
As far as I know there are a number of things that determine whether the client or server VM is used by default, such as how many processors and memory the computer has etc. These criteria are also different for different operating systems, and the 64-bit version of the JVM for Windows always defaults to the server VM. *edit*: This page explains the criteria:
Server-Class Machine Detection.
Normally you don't need to worry about whether the client or server VM are being used; functionally they work the same.