MediaPortal itself is the front-end application that you see. It can be installed with its own built-in TV section and used without the TV server at all.
TV server is another application that runs in the background and handles all the TV tuners. If you're using TV server then MediaPortal has a client plugin that connects to the server when you're watching TV. You can use this as a "proper" server and have multiple client PCs all using the tuner cards in one server machine, but IMO even for a stand-alone machine it's a better system (it's been developed more than the built-in TV plugin and has some nice features like recording multiple channels from a single DVB transponder, and seems to support different tuner cards better). The default MediaPortal installation uses TV server in a "single-seat" setup. When using it you'd never know it was a separate application - it's seamless.
If you're going to install MediaPortal I'd suggest doing a standard single-seat installation using TVServer (the install program does it all for you).