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what should we use SOAP and when should use REST?

When should we use SOAP and when should we use REST?
Can someone give a justifiable answer to this.
This was asked during an interview. I said it's up to contract with other parties. I don't know whether this is right or wrong. Can someone help with this.
SOAP I mean structure like below.
<?xml version='1.0' Encoding='UTF-8' ?>
<env:Envelope xmlns:env="http://www.w3.org/2003/05/soap-envelope">
<env:Header>
<m:reservation xmlns:m="http://travelcompany.example.org/reservation"
env:role="http://www.w3.org/2003/05/soap-envelope/role/next">
<m:reference>uuid:093a2da1-q345-739r-ba5d-pqff98fe8j7d</m:reference>
<m:dateAndTime>2007-11-29T13:20:00.000-05:00</m:dateAndTime>
</m:reservation>
<n:passenger xmlns:n="http://mycompany.example.com/employees"
env:role="http://www.w3.org/2003/05/soap-envelope/role/next">
<n:name>Fred Bloggs</n:name>
</n:passenger>
</env:Header>
<env:Body>
<p:itinerary xmlns:p="http://travelcompany.example.org/reservation/travel">
<p:departure>
<p:departing>New York</p:departing>
<p:arriving>Los Angeles</p:arriving>
<p:departureDate>2007-12-14</p:departureDate>
<p:departureTime>late afternoon</p:departureTime>
<p:seatPreference>aisle</p:seatPreference>
</p:departure>
<p:return>
<p:departing>Los Angeles</p:departing>
<p:arriving>New York</p:arriving>
<p:departureDate>2007-12-20</p:departureDate>
<p:departureTime>mid-morning</p:departureTime>
<p:seatPreference></p:seatPreference>
</p:return>
</p:itinerary>
</env:Body>
</env:Envelope>

In very few words, using REST you can describe the same operations you may expect from a database find, insert, update, delete. In REST such operation are paired with the HTTP command: GET, PUT, POST, DELETE. That's also why REST is referred as "state transfer" in the sense that you move objects in/out like in a database, in other words changing the state of your "model".
On the other hand SOAP reflect more a Remote Call Procedure (RPC) where, the message is heavily structured by XML, this means that in SOAP you do not simple transfer data but submit commands. In SOAP you can define, like in a programming language, methods and parameters. Regarding this last point to allow a client to use the "methods" (really are well structured XML messages, with name and parameters) defined by a SOAP service, the same service has to publish an XML document describing what messages and their format it can accept: if the method does not exists, it throws an error like "Service not supported".

Best practise to write a boolean API in Java Sturts 2 server?

I need to write an API to check if a user name already exists in a database.
I want my server (Struts Action class instance in tomcat server) to return true/false.
Its something like this
checkUserName?userName=john
I want to know what is the standard way to do this?
Shall I return a JSON response with just one boolean value ... seems like a overkill.
Shall I do something like manually setting the HTTP header to 200 or 404 (for true/false), but that seems to violate the actual purpose of using the headers which I believe must only be used to indicate network failures etc.

(Too long for a comment.)
I don't see any reason not to return a standard JSON response with something indicating whether or not the user name exists. That's what APIs do: there's nothing "overkill" about providing a response useful across clients.
To your second point: headers do a lot more than "indicate network problems". A 404 isn't a network problem, it means the requested resource doesn't exist. It is not appropriate in your case, because you're not requesting a resource: the resource is checkUserName, which does exist. If instead your request was /userByName/john a 404 would be appropriate if the user didn't exist. That's not an appropriate request in this case, because you don't want to return the user.
A 401 isn't a network problem, it's an authentication issue. A 302 isn't a network problem, it's a redirect. Etc. Using HTTP response codes is entirely appropriate, if they match your requests.

Sabre Java SOAP api integration

I'm new to web-service integration as well as SOAP services. And, I was trying to integrate Sabre SOAP web services using java. On the SabreDevStudio website they provided the sample SOAP request which is format given below.
<RequestPayload>
<OTA_AirAvailRQ Version="2.2.0"
xmlns="http://webservices.sabre.com/sabreXML/2011/10"
xmlns:xs="http://www.w3.org/2001/XMLSchema"
xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
<OriginDestinationInformation>
<FlightSegment DepartureDateTime="12-21">
<DestinationLocation LocationCode="DFW"/>
<OriginLocation LocationCode="HNL"/>
</FlightSegment>
</OriginDestinationInformation>
</OTA_AirAvailRQ>
</RequestPayload>
My Questions are
1, is is this all that is part of the request format?(I mean, did they hide the rest of the XML format purposefully because it was obvious?)
2, If it is so, what should it be..?
3,Somebody please explain the significance of all the three "xmlns" in the code? Which one is the request url and which one is the namespace...?
Thanks in advance.
PS:- It'll be a great help if you can create the equivalent java code for the above request. Please.

See, if you're using SOAP based service, this will be appended by it's header part as well. This node can be kept in body part but the header will have to be implemented with having binarytoken freshly created within 30 minutes (Default time to expire a token).
This explains your question 1 & 2, and for third question the answer is:-
if you'll go through the XSD's, you'll find the use of various xmlns. Better to use marshalling and unmarshalling to consume the services.
If this doesn't give a clear picture, I'll try to give you a sample of already created request.
I hope you're aware of the fact that the first service would be SessionCreateRQ.

Get SOAP XML or header in Axis web service (IBM WebSphere 7)

I have in my hands, an Axis web service that supposedly receives SOAP requests and gives SOAP responses. This was done by some other people and I don't have any prior experience with Apache Axis.
When a test program sends a sample SOAP request to the web service, at first org.apache.axis2.transport.http.AxisServlet.doPost received the request as an HTTP POST request. It then goes through some processing in Axis2 API which finally calls our own code through reflection.
At this entry point of our code, we can only get what is defined with the axis namespace in the SOAP XML request. What I need is to get the request header or the entire SOAP XML request, through Java.
A skeleton sample structure is:
<Envelope xmlns:axis="soap-service-url">
<Header>
some-header-content
</Header>
<Body>
<axis:request>
<axis:input0>sometext</axis:input0>
<axis:input1>othertext</axis:input1>
</axis:request>
</Body>
</Envelope>
At the entry point of our code, we are only getting sometext and othertext as Strings. My goal is to get the header, that is some-header-content, but I'll be happy if I can just get the entire SOAP XML.
I had been trying to find a solution for quite some time (searched a lot, looked up similar questions in SO), but the more I read up the more I get confused. I have tried:
Invoke org.apache.axis.client.Call object created from org.apache.axis.client.Service.createCall() - this always results in a NullPointerException no matter what configuration I try for setTargetEndpointAddress, setOperationName, setSOAPActionURI etc.
MessageContext.getCurrentContext() - returns null
Thought about adding a Handler but I'm not sure how to do it, or even how the Handler will pass the header content to where I actually need it (aren't handlers asynchronous?)
It is possible my understanding of how Axis functions is wrong and I need to approach this problem differently.

How to parse a custom XML-style error code response from a website

I'm developing a program that queries and prints out open data from the local transit authority, which is returned in the form of an XML response.
Normally, when there are buses scheduled to run in the next few hours (and in other typical situations), the XML response generated by the page is handled correctly by the java.net.URLConnection.getInputStream() function, and I am able to print the individual results afterwards.
The problem is when the buses are NOT running, or when some other problem with my queries develops after it is sent to the transit authority's web server. When the authority developed their service, they came up with their own unique error response codes, which are also sent as XMLs. For example, one of these error messages might look like this:
<Error xmlns:i="http://www.w3.org/2001/XMLSchema-instance">
<Code>3005</Code>
<Message>Sorry, no stop estimates found for given values.</Message>
</Error>
(This code and similar is all that I receive from the transit authority in such situations.)
However, it appears that URLConnection.getInputStream() and some of its siblings are unable to interpret this custom code as a "valid" response that I can handle and print out as an error message. Instead, they give me a more generic HTTP/1.1 404 Not Found error. This problem cascades into my program which then prints out a java.io.FileNotFoundException error pointing to the offending input stream.
My question is therefore two-fold:
1. Is there a way to retrieve, parse, and print a custom XML-formatted error code sent by a web service using the plugins that are available in Java?
2. If the above is not possible, what other tools should I use or develop to handle such custom codes as described?

URLConnection isn't up to the job of REST, in my opinion, and if you're using getInputStream, I'm almost certain you're not handling character encoding correctly.
Check out Spring's RestTemplate - it's really easy to use (just as easy as URLConnection), powerful and flexible. You will need to change the ResponseErrorHandler, because the default one will throw an exception on 404, but it looks like you want it to carry on and parse the XML in the response.