there are six type of products in magento.
(1) Simple Product:- A Magento simple product should be used for a single item without any specific selectable variations like table, chair etc.
(2) Configurable Product:- A Magento configurable product should be used for a single item with specific selectable variations like white t-shirt, blue t-shirt etc.
(3) Grouped Product:- A grouped product is just a “group” of simple products like combination of many bottle etc.
(4) Bundled Product:- A Magento bundle product should be used for a bundle of simple (or virtual) products which are not to be sold separately like group of chair and table.
(5) Virtual Product:- A Magento virtual product should be used for a virtual (not touchable) item. like a insurance, a reservation, an extra product guarantee or whatever. A virtual product does not allow selecting a shipping method at checkout simply because there’s nothing to ship.
(6) Downloadable Product:- A Magento downloadable product should be used for online software items like a pdf, MP3 file etc.