OST stands for Offline Storage Tables. It is an offline folder created by MS Outlook and MS Exchange to hold offline copies of whatever exists in the Exchange server. To make it more simple to understand, you can just call OST files as as local copy of your Exchange mailbox. It is created when your emails are delivered to your Outlook mailbox and will contain all your emails, contacts, calender entries and tasks. Outlook has to be in Cached mode for Offline folders to work. OST files allow you to work even when you are not connected to your exchange server (i.e. when you are offline) and then, when you get online it will synchronize itself with your exchange server mailbox.
On the other hand, PST stands for Personal Storage Tables. These are also known as personal folders or personal files. It is not created by Outlook or the Exchange server. Instead, you (or any user, for that matter) can create it to store all your emails, contacts, calendar entries etc. These PST files can be stored anywhere in your computer and it makes it that much easier for you to keep a backup copy of your PST files or move it from one computer to another.
Until Outlook 2002, a PST file could hold only upto 2GB of data. And as it approached that limit it would start to become unstable. But from Outlook 2003 onwards, it could hold up to 10 times that limit.
If, at any point of time your PST files become unstable, you can still repair it using the Scanpst.exe utility, which you can find when you run a search in your computer. It is a fairly easy process. All you need to do is to follow the onscreen instructions.
Similarly, if your OST file happens to become corrupted, you can scan it and repair it with the Scanost.exe utility. You will find it when you search for it in your computer.
It is possible to convert OST files to PST files using third-party applications. You can find a number of these applications online.