There are two categories for brewing beer at home - all grain and extract.
Just as it sounds, all grain brewing uses only grains and no extracts. Because grains contain unfermentable starches, we must convert the starches to sugars before they can be used for the brewing process. This requires the grains to be steeped in water for usually about an hour before the resulting liquid will contain fermentable sugar for yeast to consume. This conversion is facilitated by enzymes that are released from the grains.
Extract brewing, as you would assume, uses malt extract! There are dry extracts and liquid extracts - our extract kits use dry extracts. Most of these recipes will call for a small amount of grain to be steeped for 20 minutes, but this really just provides color rather than fermentable sugar. While malt extracts are processed, the conversion of starches to sugars takes place which means you can skip the hour-long steep and go straight to the next step - the boil. Extract recipes usually take 1 hour less to prepare than all grain.