Shperical Panoramas
These are panoramas that allow a full 360 degree view both horizonally and vertically. The viewer can pan around the entire scene and also look from the ground to sky. Whilst generally more impressive, these tend to be a little more difficult to create, particularly in confined spaces.
Cylindrical Panoramas
These panoramas only allow rotation on the horizontal plane. For many situations they are perfectly adequate and convey the important aspects of the scene. There is no uneccessary sky or floor in the panorama so the file size can be smaller and less compression used - meaning higher quality images.