lots of info on hibernation in this thread, good read imo
In Windows 2000 and Windows XP, STANDBY and HIBERNATE are supported and can be activated on the OS level. For Windows 98, it has to be a feature supported by the manufactuer of the PC.
Although STANDBY and HIBERNATE both perform power-saving functions, they are different in behavior.
STANDBY cuts power to peripheral devices when they are not in use, including the monitor and hard drive. Power however is left on for RAM so whatever's in physical memory won't be lost, e.g., any work that you may have done remains before STANDBY sets in.
HIBERNATE saves the contents of RAM to your hard disk when you turn your computer off. When you switch on your computer again, documents and application are open just as you left them before the powering down.