Both types of relationships work like foreign key relationships in a relational database, and produce some of the same effect on the pages for the objects in the relationship.
When you define the relationship between two objects, the Force Platform does a number of things:
Creates a field in the child object with an icon that allows users to look up valid values from the parent object. When a user views the child record in a detail page, the Record Name of the parent is shown for the field as a link that takes the user directly to the detail page for the parent record.
Creates a ...