What is the difference between a standard water heater and a direct vent water heater?

Generally, a direct vent must be next to an outside wall or be connected to a chimney that extends 2-4 feet above roof peak (all gases and fumes from the burner will vent naturally). A power vent is used when the unit is put inside the home in a closet or on an interior wall. It must have venting to an outside wall and must have a blower fan to remove gases from the water heater so they don't back up into the house.