The classical guitar has nylon strings and a wider neck than the other types of guitar and is played with the fingers of the right hand rather than a pick. It is most commonly used for playing Classical, Flamenco and Fingerstyles. Generally it is much cheaper than other types of guitar and is recommended for beginning guitarists due to the wider fretboard, making it easier to play and the nylon strings being gentler on beginner fingers.
The steel string acoustic has steel strings and is most commonly played by strumming or fingerpicking groups of notes called chords. This is the type of acoustic guitar you will hear in most modern styles of music, e.g., Top 40 Rock and Pop music.
Acoustic guitars can be amplified for performances at large venues where the acoustic guitar needs amplification to be heard by using a microphone placed near the soundhole or by placing a portable pickup on the body of the guitar.