Here is the basic difference between web-only and custom:
Web-only: this list is static, never updates, just a recommended reading list for a certain topic / range of books at your library. It can be turned off and on at any time. For instance "100 Best SciFi books of all time" would be a good idea for a web-only static list. There is no patron signup for these lists, they are simple meant for online browsing.
Custom: this list will be sent out to all your patrons that subscribe to it. This is great if you need a list where you can feature new material at regular intervals / repeatedly. For install "What's new in Sci-Fi" would allow you to create recurring newsletters that get sent out to your patrons and always feature new/different books. Patrons can subscribe to these lists on the signup page and browse your past newsletter editions via our archive.