Difference between network dataset and geometric network

The geometric network is used to model things like utility networks, drainage, or any other network where the commodity does not have free will.

Network dataset is used for networks where "an agent" can choose the path, such as transportation networks.

There a description here (scroll down to the What is a network? section): http://help.arcgis.com/en/arcgisdesktop/10.0/help/index.html#//004700000001000000.htm

Geometric networks (utility and river networks)
River networks and utility networks—like electrical, gas, sewer, and water lines—allow travel on edges in only one direction at a time. The agent in the network—for instance, the oil flowing in a pipeline—can't choose which direction to travel; rather, the path it takes is determined by external forces: gravity, electromagnetism, water pressure, and so on. An engineer can control the flow of the agent by controlling how external forces act on the agent.

Network datasets (transportation networks)
Transportation networks—like street, pedestrian, and railroad networks—can allow travel on edges in both directions. The agent on the network—for instance, a truck driver traveling on roads—is generally free to decide the direction of traversal as well as the destination.