Sanded Grout & Unsanded Grout

What is the difference between sanded and unsaded grouts?
Sanded grout and unsanded grout both have their own advantages and disadvantages in different types of installations.
As it is obvious, sanded grout has sand in the grout while unsanded grout does not have it. Sand reinforces the cement in the grout and increases its strength and less likely to crack. 

What is the grout made of?
Sanded grout is basically just sand and cement mixed with a color pigment to give the grout its color but unsanded grout is just cement and a color pigment. So, unsanded grout is not as strong and durable as sanded grout and it is more likely to crack especially on wider grout joints.

Where is the use?
Sanded grout is the best type of grout to use on ceramic and porcelain tile installations that have over a 1/16th inch grout joint.
Unsaded grout is the best product for natural stones (polished) with square edges and less gaps in between. As unsanded grout is smoother, it can be used for polished ceramic tiles such as "subway tile". It is strongly recommended that not to use sanded grout on polished natural stones, because it will scratches the surface.