Rights-Managed Images: Images you purchase for a specific purpose at a specific price (think renting the photo or paying to borrow the image). The price of the picture is usually determined by how you want to use the picture (on the web, in print, etc.). The plus side to using a rights managed photo is that you will most likely NOT see anyone else using the same photo (or model) promoting another product.
Royalty-Free Images: Images purchased outright, either as single images or on disc volumes in bulk, and can be used any way you want, with certain restrictions. Pricing for royalty-free images is usually decided by the size of file you want to purchase; the larger the file (meaning, the better the quality of the image), the higher the price. The good news with royalty-free images is that if you are using them for the web (on websites, advertisements, etc.), you can use the smaller files, thus saving yourself a lot of money.