A parked domain is an additional domain that points to the main directory of your account. You can park as many domains your account allows at no cost. A parked domain will resolve to your primary domain name.
You also have to make sure that the parked domain is registerd and the name servers are set to our nameservers.
Say, your primary is yourdomain.com and you park park123.com. If you type park123.com in your address bar, it will resolve to yourdomain.com but in the address bar you will see park123.com.
An add-on domain allows you to run a separate web site to your primary domain. When you create an add-on domain, it makes a folder in your public_html folder and you upload the site content into that folder. So essentially, you are running 2 separate sites with separate content, off one account.
If your primary is yourdomain.com and you create domain123.com as an add-on domain, the add-on domain will point to the /domain123/folder under public_html.  Then, if you type domain123.com in your address bar, it will resolve to the content in the /domain123 folder/. You'll see domain123.com in your address bar just like any other website.
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