Embroidery is where your design is digitised and converted into a file format that an embroidery machine can read. It is best used for creating logos on thicker garments as a thinner garment would not hold the stitch embroidery as well as a polo or a jacket for instance.
It is best used when you have garments that are washed regularly, such as uniforms. It does bear a set-up cost however due to the digitising of the design.