I am new to ArcEngine. I am trying to develop a tool to automate digitization of line between two points. please suggest me whether ArcEngine is needed to develop this tool or i can go for Add-ins to develop the tool? If ArcEngine is needed, please suggest me the good book to develop tools...
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I don't understand your comparison between Add-ins and ArcGIS Engine.
ArcGIS Engine is a collection of GIS components and developer resources that can be embedded, allowing you to add dynamic mapping and GIS capabilities to existing applications or build new custom mapping applications. Developers use ArcGIS Engine to deploy GIS data, maps, and geoprocessing scripts in desktop or mobile applications using application programming interfaces (APIs) for COM, .NET, Java, and C++. For more information, please see:
http://www.esri.com/software/arcgis/arcgisengine/index.html
http://resources.arcgis.com/gallery/video/arcgis-engine/details?entryID=F6C050B4-1422-2418-88D6-B63D54BDBE08
I am unable to recommend any books, however I think all the information you need to get started with developing applications using ArcGIS Engine is available on ESRI's resources page at:
http://resources.arcgis.com/content/arcgis-engine/10.0/about
Add-ins provide developers a method to easily extend ArcGIS Desktop application capabilities. This is done with a declaratively based framework for creating blocks of custom functionality within a single compressed file. These add-in files can then be easily shared between users without relying on installation programs or Component Object Model (COM) registration. Add-in files can be installed by copying them to a well-known folder location and uninstalled by deleting them from that folder location.
Desktop add-ins can be authored using VB.NET, C#, or Java. To simplify development, ESRI provides add-in wizards that integrate with popular development environments including Eclipse and Microsoft Visual Studio (2008 \ 2010).
More links on add-ins:
http://resources.arcgis.com/gallery/video/arcgis-desktop/details?entryID=F6C89D10-1422-2418-7F87-2A1D5056A5DF
http://blogs.esri.com/Dev/blogs/arcgisdesktop/archive/2010/05/05/Add_2D00_ins-for-ArcGIS-Desktop-10.aspx
http://help.arcgis.com/en/sdk/10.0/arcobjects_net/conceptualhelp/index.html#/Building_add_ins_for_ArcGIS_Desktop/0001000000w2000000/
I hope this helps.