The difference is that it is only offered online. The Watch ESPN channel (or website, or app) gives you access to the ESPN family of networks, but that access it mitigated by the TV and/or internet service provider subscriptions you have. Here is my situation as an example:

Through Time Warner Cable, I have pay for a cable package that includes access to ESPN, ESPN2, ESPNews, and ESPN3. My package does NOT include ESPNU, The Longhorn Network, the SEC Network (yet), ESPN Goaline, or ESPN Deportes. So when I open the Watch ESPN channel on my Roku 3, it shows everything currently being broadcast on all the channels--not just the ones I have access to. If I click on the ESPN offering, the video starts playing. If I click on the Longhorn Network offering or ESPNU offering, I get a popup that states my subscriptions don't provide access to that content.

When the games are over, I can then do a search of ESPN3 replay options and find all the games I want to see whether I had access to the live broadcasts or not.

Hope that helps.