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We measure time on Earth by the position of celestial objects in the sky. Solar time is based on the position of the sun. It is the time we all use where a day is defined as 24 hours, the average time that it takes for the sun to return to its highest point. Local noon in solar time is the moment when the sun is at its highest point in the sky.
The Earth does a full rotation each day, but because it is also traveling on its orbit around the Sun, it has to rotate about 1° more than a full 360° to get from one solar noon to the next. However, the stars are so far away, that the Earth's movement on its orbit makes only a negligible difference to their apparent direction.
Sidereal time is based on when the vernal equinox passes the upper meridian. This takes approximately 4 minutes less than a solar day.
1 sidereal day = 23 hours, 56 minutes, 4.1 seconds
Sidereal time is useful to astronomers because any object crosses the upper meridian when the local sidereal time is equal to the object's right ascension. Knowing when an object will near the meridian is useful because when an object is high in the sky, the distorting effect's of the Earth's atmosphere are minimized.