STUFF - Delete a specified length of characters and insert another set of characters at a specified starting point. eg.

SELECT STUFF('VASANTH', 3, 2, 'XYZ')

3 - Starting Position from where the Replace Starts
1 - upto Which position it needs to be replaced from '3'
'XYZ' - Replacing characters in that position

Result is : VAXYZNTH

REPLACE - Replace all occurrences of the second given string expression in the first string expression with a third expression. eg.

SELECT REPLACE('VASANTH', 'A', 'KZT')

Result is : VKZTSKZTNTH