open = pure clientside , that means, all informations are on ur pc, u r server when opening a game etc. (u can do whatever u want here, blizzard dont care) u can change items , make new items etc. everything u want
closebnet : mostly server side , all account informations are saved on bnet servers. games are created on bnet servers. u can login to ur account from wherever u are (aslong d2 is installed).
also u have to accept the terms of conditions of blizzard , which is not so on open.