Replication uses ZFS snapshots. Rsync uses the rsync protocol. Both can transfer data to remote systems using "deltas", ie. differences (additions, deletions, modifications etc.) so that you minimise the amount of data transferred across the network.
If you are transferring data to another ZFS system, then Replication would make the most sense, but if you are transferring data to a non-ZFS system then rsync is your only option.