Difference between clustered and nonclustered index

You really need to keep two issues apart:

1) the primary key is a logical construct - one of the candidate keys that uniquely and reliably identifies every row in your table. This can be anything, really - an INT, a GUID, a string - pick what makes most sense for your scenario.
 2) the clustering key (the column or columns that define the "clustered index" on the table) - this is a physical storage-related thing, and here, a small, stable, ever-increasing data type is your best pick - INT or BIGINT as your default option.

Another better explanation is below :

A clustered index alters the way that the rows are stored. When you create a clustered index on a column (or a number of columns), SQL server sorts the table’s rows by that column(s). It is like a dictionary, where all words are sorted in alphabetical order in the entire book.

A non-clustered index, on the other hand, does not alter the way the rows are stored in the table. It creates a completely different object within the table that contains the column(s) selected for indexing and a pointer back to the table’s rows containing the data. It is like an index in the last pages of a book, where keywords are sorted and contain the page number to the material of the book for faster reference.

here is a very good detail of it (source): http://www.itbully.com/node/66