Since you used the term "service," I am assuming you are talking about running Oracle in a Windows environment. In Windows, a "service" is basically a program that can be run without anyone signed on to the machine. This differs from programs such as Microsoft Word or Internet Explorer. With Word or IE, you have to be signed on to the machine to start those programs. This is less than ideal for running a database.
Why should someone have to be physically signed on to the server for the database to be up and running? It shouldn't. So a service is created. One of the other benefits is that a service can be configured to automatically start when the machine is booted up. Most Oracle databases running on Windows automatically start on boot up. Can you start Word or IE on boot up? No you can't. This is because these programs do not run as a service.
A "process" is any running program. When you start Oracle on Windows, it starts the 'oracle.exe' program. The 'oracle.exe' program is now running as a process in the operating system. Services, in essence, just start these processes for you automatically.
This was first published in October 2003