The difference is the life cycle. Annual plants germinate, bloom, set seed and die all in one year. Biennial plants have a life cycle of two years, so they germinate and grow one year, bloom and die the following. Everything which lasts longer than two years is perennial, which in practical terms usually means it grows and flowers for many years.
This is important in terms of value for money. Also when you buy a plant you know what you are getting. Annuals are often grown from seed to add colour in the summer month, and many bedding plants are treated as annuals because they will not survive our winters.