I think for a lot of people explaining google voice is getting OLD OLD OLD. There has to be thousands of explanations all over the net. Personally (and yes I am an asshole) I think if you can't figure out what Google Voice is, the difference between the two account types, how to use the service, how to integrate it in your life by a few simple google searches then I seriously question your capability to even understand it. It adds a whole new level of complexity (it's not really that complex though - see above) you may not be able to fully grasp. I also think before anybody can walk out the store with a phone they need to pass the "Mount storage card, create folders, drag and drop test".....but I digress.
I also understand some people are just not inclined to understand such things, so please don't take any offense to what I just posted above. I honestly don't take any offense to your silly sunglasses, and funny pants.
Okay so here we go.
USING YOUR OWN NUMBER
Congrats you have made it this far. The using your own number option allows you to receive the benefits of Google Voice's VOICEMAIL SERVICE - such as transcribed voicemails, email notifications, downloading copies of voicemails, and custom voicemail greetings and maybe some other things but thats the gist of it.
How does it work? After signing up Google will provide you with a special number which you tell your carrier to FORWARD calls to that you DO NOT ANSWER. How you forward calls is dependent upon your carrier (Note to Verizion users - yes there is other carriers and wouldn't you know other 'Droid' phones too!)
You will no longer get the Voicemail notification that you are used to, you will get a text, email or both (that decision is up to you and can be altered).
GETTING A GOOGLE VOICE NUMBER
When you get a Google Voice number you get a number provided by Google which you can then hand out to people (like bill collectors). Someone calls or texts this "new" number it is then FORWARDED to your current number (actually it can be forwarded to many different number - like you house, office, or mobile - bottom line it does not replace your current number or service it's just a forwarding service.)
You can do cool stuff like block certain numbers, send certain callers to voice mail, listen in as people leave voicemails, get copies of texts and voicemail transcriptions emailed to you. You can also do everything that the "use existing number" can do. Why you would get the "use existing number" option and miss out on the extra stuff you can do with your google voice numbers is beyond me.
REAL LIFE CASE STUDY
I put my google number on ads, business cards, automobile. I have copies of clients voicemails, I could block certain clients if they became troublesome, I can have custom geetings for my best clients....etc etc etc. I also give this number to my place of employment - so I can send all their calls straight to voicemail.
I forward my carrier provided number to Google Voice so that I can have custom greetings for family, transcribed emails and basically one central location for voicemails.