Personalization Server means when you install Personalization rules engine on WebSphere Application Server without installing full websphere portal server. The Personalization server enables you to serve personalized content to the users and record site metrics. Please note that even though you can execute personalization rules on Personalization Server, you need WebSphere Portal installation to author those rules.
You can use Personalization Server to generate personalize response for web service or generate personalized RSS feed.
Personalization uses the IBM Java Content Repository for storage of rules, campaigns, and other objects both during the authoring phase and runtime phase. You can install the repository, which stores the rules and campaigns, outside of WebSphere Portal. In this configuration, the Java Content Repository does not use WebSphere Portal Access Control, nor does it use the federated LDAP service of the portal