which should i prefer to install in my system openssh or ssh package provided by SUN by default. can i have two packages installed at the same time?
Solaris 8 did not have an included ssh, so you had to use openssh. Solaris 10 includes ssh. Not sure about Solaris 9. I have recently succeeded in getting folks around here to stop installing openssh on Solaris 10. The Solaris 10 ssh is good enough and I don't see any reason to install openssh. But to answer your question, it certainly is possible to do so.
The main difference I see between the two is how the crypto stuff is done. Openssh depends on the sweet crypto library in openssl. The Solaris 10 ssh uses something that Sun calls "the Solaris cryptographic framework". We still install openssl because lots of other stuff needs it. Also the openssl command itself is great for various scripting applications. I can't find it now, but I remember reading something that indicated that the Solaris framework can use special crypto hardware if it's present. That's pretty cool and it's a good reason to prefer Solaris ssh over openssh.
A secondary consideration is that Solaris ssh is officially supported by Sun (or Oracle).
But if anyone knows a good reason to install openssh on Solaris 10, please speak up. I would welcome another point of view on the subject.
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Yes, it can use the cryptographic accelerator which is in some SPARC processors (UltraSPARC T1 is one)