Parked Domains are what you would use if, say you wanted to use another domain as an alternate from your account's main domain. These will point to your public_html folder or wherever you want it to point to. An add-on domain however is like a Parked Domain, though instead of pointing to your site's public_html folder, it can point to a subdomain, much like a redirect. That's really the best I can describe it as at the moment.