Forwarder

You have a single custom email alias that just forwards the email to other full, hosted account.

Pros
• Cheap
• Easy to set up

Cons
• Responding will show your personal email
• Can only have a single alias, each alias costs more money

Hosted

You have full, hosted—and separate—email account with as many aliases as you’d like.

Pros
• Responding will show your custom email
• Have as many email addresses as you want
• A separate account from your personal email
• Reusability: moving web hosts or domain registars is simpler

Cons
• More expensive
• Harder to set up