Peer review can categorized by three varieties.
Open Review
Single Blind Review
Double Blind Review
Open Review
Reviewer and author are known to each other.
Advantage
Some scientists feel this is the best way to prevent malicious comments, stop plagiarism, prevent reviewers from drawing upon their own 'agenda' and encourage open, honest reviewing.
Disadvantage
Others argue the opposite view. They see open review as a less honest process in which politeness or fear of retribution may cause a reviewer to withhold or tone down criticism. For example, junior reviewers may hesitate to criticize more esteemed authors for fear of damaging their prospects. Independent studies tend to support this.
Single Blind Review
The names of the reviewers are hidden from the author. This is the traditional method of reviewing and is, by far, the most common type.
Advantage
Reviewer anonymity allows for impartial decisions free from influence by the author.
Disadvantage
Authors fear the risk that reviewers working in the same field may withhold submission of the review in order to delay publication, thereby giving the reviewer the opportunity to publish first. Reviewers may use their anonymity as justification for being unnecessarily critical or harsh when commenting on the author's work.
Double Blind Review
Both the reviewer and the author remain anonymous.
Advantage
Author anonymity prevents any reviewer bias based on, for example, an author's country of origin or previous controversial work. Articles written by 'prestigious' or renowned authors are considered on the basis of the content of their papers, rather than on the author's reputation
Disadvantage
It is uncertain whether a paper can ever truly be 'blind' - especially in specialty 'niche' areas. Reviewers can often identify the author through the paper's style, subject matter or self-citation.