Hello,
I'll recommend an article for a more detailed explanation but essentially the Outlook version is an extension to the webclient that allows
you to access CRM via Outlook and work from there. Tracking e-mails, synchronizing appointments, creating Leads from E-mails, managing Contact information, are only a few of the examples that can be achieved via the Outlook Client version.
The web application allows you to use and make the most out of the whole of its functionalities plus you can customize and extend development on the platform itself.