Very simplistically, the difference is that the owner or seller is the bank. Some, all or none of your rent payment goes to the loan or down payment, interest rate is typically higher for a rent to own, you would usually have less documentation process with rent to own. Often a short term arrangement until you get a standard loan and purchase. And, if you default often there is no credit reporting. Its important for you to seek legal counsel to review the documents at the very least. You do not own the property, you are renting.
With a "typical" mortgage, buyer goes through purchase process and lending process and once you close on the sale, your payments go to the mortgage. If you are late, or default, the credit reporting process proceeds as with any other default. On the upside, if you pay well and stay on track your credit report gets stronger showing that you are able to handle your debt well. But, you own the property.
With a rent to own the owner sets the rules with a typical mortgage the lender and govt sets the rules and regulations.
If the owner has a loan on the property and enters into a rent to own or "owner carry" type situation, his lender can call the note due. Again, seek legal counsel as you need to protect yourself in case the seller is less that honest.