With the E-purse option you load the card with money. It's paying the same bus fare as normal, only you don't have to find coins every time you're about to get on the bus. The system keeps track of how long it's been since you were on a bus, so transfers within 2 hours of a fare being paid are free.
The PugetPass option allows you to pay a monthly chunk of money and get unlimited rides. The confusing part: you can buy a pass that covers a certain cost per ride. Maybe you usually take a bus that costs $2.25, you'll want to get the pass at the $2.25 level. That gets you unlimited rides on bus routes that cost $2.25. If you take a bus with a higher fare, you can pay the difference using E-purse money as a backup.