Let's treat the development of these products historically:
In the distant past, the only way to connect a battery for charging or discharging was to flip a switch. This switch usually connected the battery to the main electrical bus, and the main electrical bus was where connections branched out to various consumers of power and charging sources. If you wanted a battery bank to get charged, say, while the engine was running, you flipped its switch to connect it to the main bus. If, after the engine was stopped, you wanted to keep this bank in reserve, you disconnected it from the main bus.
Basic Battery Switches:
This is still a perfectly acceptable way to do things, especially for those of us who like to be in control. (My boat is still this way.) The downside is that you can forget to flip the right switches and a) run all your batteries dead and not be able to start your engine or b) turn all banks off with the engine running and fry your alternator diodes.
Then came the battery isolator, which uses diodes to create “one-way valves” for electrical current. Isolators allow charging current to go to multiple batteries, but prevent current from flowing from one battery to the other, or back to/through the charging source. This is automatic and convenient, but has a price: The diodes create resistance that lowers the charging voltage, with the excess energy expressing itself as heat. This is why battery isolators have cooling fins all over their cases, and one must compensate for the voltage drop with higher charging voltage. If you’re a cruising sailor and every amp counts, you don’t want to be wasting charging current to create heat in the battery compartment.
An isolator:
Now we have what are variously called Voltage Sensitive Relays, Automatic Charging Relays, or battery combiners. These devices connect two batteries (cut in) when they sense a charging voltage (usually 13.7 volts) and disconnect them (cut out) when they sense that the charging voltage is no longer present (usually 12.8 volts). At around $80, these devices do this without adding resistance, and they cause no voltage drop.
A BEP VSR, in one of their "clusters:"
While there are many possibilities for a VSR onboard, their main purpose is to isolate a starting battery so you’ll always have juice to crank your engine. All the charging current from your alternator can flow to the house banks when your engine is running, and the VSR will cut in to recharge your starting battery as well. When you stop your engine, the VSR will cut out (after a while) and your starting battery will be isolated, and kept in reserve for starting. This system requires no switching or thinking: just leave the house banks on all the time for daily use, and the starting battery will always be held in reserve. Very slick.
But of course most people won’t be happy with this, and will insist on manual overrides so they can connect their starting battery to the main bus manually, or cut it off from charging altogether, say if they wanted to start their engine with help from the house banks, or use the starting battery for a little extra oomph for a radio transmission. This means the addition of a manual switch, as with Blue Sea Systems’ Add-A-Battery package, or BEP’s various clusters.
Blue Sea Systems' Add-A-Battery (two products in same package):
With this arrangement, if the battery switch is off, the battery is isolated from charging sources (but could still be connected to a shore power charger), in the on position gets charged through the VSR, and in the combine position gets connected to the main bus. The manual overrides permit control, but also human error.
Finally, at a substantially higher price (around $250), Balmar’s Digital Duo Charge acts like a VSR and a smart charger rolled into one. The Digital Duo Charge is programmable for voltage and battery chemistry. While a VSR opens a valve when the right conditions are met, the Digital Duo Charge opens the valve, then carefully regulates the current that flows through it.
The Digital Duo Charge comes into its own when you’ve got different battery chemistries aboard: Let’s say you’ve got gel cells for your house banks, which like a lower charging voltage, and a regular flooded starting battery, which likes a higher charging voltage. The Digital Duo Charge can be programmed to create two different charging regimens.
On my system (totally manual) when cruising I’d sometimes disconnect the starting battery from the main bus when I was doing a major alternator charge on the house banks: If my house banks were way down, and I knew my high output alternator and smart regulator were about to go through a several-hour, multi-stage, intensive charge, I thought I’d save my starting battery from that possibly punishing treatment, and isolate the house banks for charging. This may have all been in my head, the starting battery might not have cared, but to accomplish this same end, either the Digital Duo Charge, or a manual disconnect on a VSR, would treat the starting battery gently.