Some folks want their log furniture to be a little less rustic than others. Not for decorating appeal, both German Peeled and Hand Sanded logs will give you that desired relaxed, rustic decor look. These are different processes and deliver slight, yet important difference in the finished surface of the logs. Both are done on well cured logs.
The furniture maker rotates logs against sets of spinning blades to give them the German Peeled surface finish. This results in peeled look that is smooth enough to be splinter free, though it could still have a few rough spots that can snag cloth that rubs against it in these areas. In the days before polyester, spandex and nylons - this finish wasn't an issue.
Hand Sanded logs will give you a much smoother log surface and is probably more preferable in home decor versus hunting camps and weekend cabins where pantyhose and fine clothing won't be an issue. This is an additional step to building log furniture though and will cost a bit more than German Peeled due to more work involved in finishing the piece.