Imagine you have to write a report that lists out customer addresses. You will write code to get the input from the user via selection screen and then read the data based on the seletion from the database into an internal table(or a set of internal tables). Now once you have the data you will need to output this. In normal list reports, you will have to use 'WRITE' statements to format the output into columns and rows. Now suppose user wants some interactivity in it. Then you will have to provide some buttons and/or menu options through custom pf-status and then write logic for reacting to the user actions. After writing many such reportsm, you will feel like some of this can generalized and reused in every report.
That is exactly what ALV does. It takes out most of repeated sections of the code from out of you and provides you with excellent outputting functionality. It provides many standard functions like 'print', 'sort', 'filter', 'sum' etc by default. Imagine writing code yourself for all these if you were writing normal list program. One more major difference is the editing feature. If you were write a program that gives the user with editing features, then you will have to write a lot of logic. But with ALV, all the features like adding a row, deleting a row, copying a row, editing some fields of a row etc come by default.
Likewise, interactivity has become quite easy to implement. Like double clicking on a customer number, if the user wants to go to display customer transaction, it is very easy using ALV.
As pointed out here by others, go through the documentation of ALV and go through some of those demo programs and you will know the difference. ALV takes out a lot of burden of coding everything away from you and lets you worry about the business functionality that your report provides, rather than formatting the output or providing interactivity to the output.
Hope this helps,
Srinivas
Bluesky
