Condensation on the outside of your windows is from the same conditions that cause dew to appear on grass or condensation or frost to appear on a car that is parked outside overnight. It forms when moist air comes into contact with cool surfaces such as glass, when the dew point in the air is higher than the temperature of the glass. This can happen when a cool night follows a warm day, most common during the spring and fall seasons. Most of the time condensation does not occur with less energy efficient windows, because heat from the warm interior of the home escapes through the window, keeping the exterior temperature of the glass high enough to prevent condensation.
Having energy efficient windows in your building will significantly reduce the interior heat conducted through the glass. This lowers the temperature of the outside glass, which at a certain dew point can result in condensation. Exterior condensation is actually an indication that the insulating glass in your windows is performing as it should, reducing heat loss and lowering your utility costs. It is a result of the normal functioning of energy efficient windows.
Condensation on the inside of windows and doors occurs because of high humidity and poor air flow inside the home. In many older homes there are gaps in the windows where drafts can be felt and air will flow. This exchange of air, in many cases, was sufficient to prevent condensation from forming. High-performance windows today are designed to be air tight to reduce heat loss, which also reduces air flow. Consistant condensation on the inside of your windows can leed to signifacant mold/mildew growth, and can damage the fine finshes on wood windows. A few ways you can fight interior condensation are to reduce moisture sources (humidifiers, plants, aquariums, etc.); increase ventilation (open windows for a few minutes each day, especially during steam-producing activities such as showering, laundry and cooking); and leave closed interior shades up a couple inches above the window sill to allow for air movement between the shades and the window.