Membership Plugin: blog-by-blog V Sitewide

I am looking at installing this and have read the install page over a few times. What I can't get clear in my head is the difference in application between installing in mu-plugins and plugins.

Is it that it essentially works the same, but in one blogs have a choice to activate and the other it is automatically activated?

Please can you explain to me how it works under the two different options. Thanks.