Hi!
Welcome to the world of Cricut.
The types of cartridges in the beginning of Cricut were to identify content mostly shapes versus mostly font. Then it had to do with quantity of images, and then it has to do with the different types of machines. LOL!!! It can get confusing.
All you need to know is that there are two physical style of cartridges. The Cricut cartridges work in all machines O-Bug, Create, Expression, Cake, Expression 2 and Imagine.
The Imagine cartridges only work in the Imagine Machine and some Imagine cartridges will work in the E2.
The shape cartridges would be cartridges like A Quilted Christmas, Mickey Mouse, Elegant Edges, these cartridges are mostly shapes or images and maybe a font or envelopes, etc. These can be used in any machine, and are considered full content cartridges. Which means lots and lots of images.
The font cartridges are like Calligraphy, Mickey Mouse Font, Lyrical Letters. They are mostly fonts, maybe 2 or 3 styles, and can have tags, cards or images as a bonus. These can be used in any machine, and are considered full content cartridges. Which means lots and lots of images.
Lites are exclusive to Wal Mart. They can be used in many machines, they don't have a lot of content, usually 1/3 to 1/2 what you would find in a full cartridge. Designs vary. I always consider these cartridges as theme specific, not a lot of variety, but a cartridge all about a theme, like Varsity Letter only has the block letters, Handyman is all about building stuff, etc.
Solutions came out before the Lites, and are similar in content and uses. Christmas Village which is the free one in CCR is a Solution cartridge. These can be used in all machines.
Cake cartridges came out when the Cricut Cake Machines came out. The cartridge doesn't know what it is cutting so it can cut fondant or paper. It's the food safe cake machines that are used for food. I have used regular cartridges in my cake machine, as well as the cake cartridges to cut paper. The cake cartridges have very nice alphabets and borders, and are very versatile. These cartridges tend to be seasonal so you get a great sampling of holiday cuts.
Project and Event cartridges are similar to solution cartridges, but offer less images. These cartridges are specialized and have multi layer cuts, like the flowers or the album cartridge. They can be used in all machines.
The Imagine cartridges come in 2 styles. One style is to make patterned/colored paper, the other style of cartridge offers images to be cut as well as patterned/colored paper. I don't have an Imagine so I don't know about the cartridge content.
The E2 will allow you to use all regular cartridges (they are grey colored) and some of the Imagine cartridges (they are white, I think). However, the E2 doesn't to the printing of paper, but it will cut the images from the Imagine cartridges. I don't have an E2 either, but I think I have this right.
Okay, lots of info, hope it helps.