Feature-linked annotation is a special type of geodatabase annotation, the other being standard annotation.
A few points about feature-linked annotation:
1. A feature-linked annotation feature class is linked to a regular feature class via a geodatabase relationship class.
2. You can specify different behaviors for feature-linked annotation. For example as you add/delete features, annotation is also added/deleted. If the feature is moved, annotation also moves. These are both optional.
3. Placement for new annotation features can be based on placement properties specified in the annotation feature class.
4. When feature attributes are updated, the annotation text updates based on the expression stored in the annotation feature class. This expression is fixed after feature class creation.
5. Placement properties are also stored in the feature class and cannot be changed after creation.
6. Manual edits to text strings are allowed for feature linked annotation, however these edits will be lost when attributes in the linked feature class are updated. The attribute update automatically triggers the framework to recalculate the annotation text based on the expression stored.
9. For standard annotation, all annotation features store their own text symbol. This symbol is stored in a BLOB field (Binary Large OBject). However, for feature-linked annotation, a common text symbol can be stored centrally and referenced by may features.
10. Certain edits can change symbol storage for feature-linked annotation, causing the complete symbol to be stored in the BLOB field (as with standard annotation).
11. The only symbol edits to feature-linked that will not cause the annotation symbol to be stored inline in the BLOB field are on the IGroupSymbol interface. These properties are Color, Flip Angle, Size, Vertical Alignment, X Offset and Y Offset.
12. If the Draw toolbar is used to create new feature-linked geodatabase annotation, the symbol for the new features will be stored inline.
13. Storing symbols inline can cause performance degradation and an increaase in the size of your geodatabase.
Refer to the articles below for more information about geodatabase annotation and about the options for storing text in ArcGIS.