With Pega 7.1.7 local data storage replaces data tables. Local data storage is a feature that lets you store data records for a data type within Pega 7 Platform without having to manually create or maintain database tables.
Where as a database table instance associates an existing class (and other classes derived by pattern inheritance from that class) with an existing relational database table or view, in the PegaRULES database or an external database.
Even if you create a local data storage for a data type, the system creates a relational database table in the backend and associates the Data Type class with that table just like Data Tables prior to Pega7. I still don't see a major difference (or benefit) between local data storage and data table
Earlier we have the data table concept which will associate an existing class(and other classes derived by pattern inheritance from that class) with an existing relational database table or view, in the PegaRULES database or an external database. And we don't have the option to create the table in database from Pega product for users in PegaDATA schema as the data should be stored in the PegaDATA schema.
So here comes the concept called Data Type which will create a class derived from Data- class. So when you create a Data Type then it will create a class inherited from Data- class and the properties which were added in your Data Type will be stored in pr_other table in the blob column.
Now if you want to store your data in the dedicated table instead of storing it in pr_other table then you can create the local storage to that data type, which will create the dedicated table in PegaDATA schema with the properties you have added in your data type and a data page, data page list to retrieve your data into Pega product.
So finally the Data Type contains the concept of Local storage which will allow the user to create the dedicated table in the PegaDATA schema along with the data page and page list to retrieve the data into the product.
Apart from these there are no further differences related to these two concepts as per my understanding.
DataTable wizard creates a concrete class and associated properties and other rules (List, EditList, ListView and Validate rules). Instances of classes created through this facility are stored in the PegaRULES database table named pr_other and are limited to 1,000 rows.
Since the data table may eventually contain hundreds of rows, has high turnover, or may be moved to other Process Commander systems, it is advisable to have a database table for the data table class.
As you said that, the main difference I see is " Local storage will allow the user to create the dedicated table in the PegaDATA schema" from Pega Product itself which was not there prior to Pega7.