Templates are pre-made layouts that you can add your photos and text to. They are also fully-editable, so you can edit all the objects you see on your page (resize, rotate, delete, etc.).
Kits are made up of "loose" items that you can use to add to blank pages, template pages, etc.
Often, designers will make a kit (a collection of "loose" embellishments, papers, etc.) as well as a coordinating template based on that kit. The template will often include items that come with the kit, but in the the template you get a professionally laid-out page to work with.
Whether you choose a kit or a template depends on how you like to design your pages, starting from scratch, or from a professionally designed (yet fully-editable layout).