Archetypes and prefabs share a number of similarities, but most noticeably in that we use them to create instances of an object. All instances of an archetype on a map will update when an archetype is stored in a package, and that's one of the convenient reasons for using them.
Furthermore, if you chose to only alter an instance of an archetype, then the rest of those on the map will remain the same! So you have both ends of the spectrum, all within one tool. Archetypes also allow us to create physical representations of our code, to be manipulated and edited within the UDK editor, and later used in the game itself.
Archetypes are different from prefabs in three distinct ways: