ppm is pulse proportional modulation. this is what 80% of the RC systems use.
pcm is pulse control modulation (i think this is the acronym). it is used on maybe 20% of the systems - mainly the most expensive models.

ppm sends a radio pulse, where the width of the pulse tells the servo where to position itself.
pcm send a digital packet, telling the receiver (via a number) where to position itself. the packet has error detection built-in so the receiver knows if it has received good data. with ppm, if there is interference, the receiver really cannot detect it and is likely to cause the servo to jump to some random position until the interference is removed.

both systems are perfectly fine. pcm receivers can have a feature whereby if the receiver detects no good packets for some time, then it can move the servos to some pre-defined position. this is hard to do with ppm receivers. this feature causes you to crash anyway, but usually further away than with ppm receivers.

some people think you should use pcm with gas engines since pcm receivers mask interference problems. but really if you have interference (from a gas spark plug), you will have problems with either system. the pcm system just hides the glitches from the spark.

both systems really use fm (frequency modulation) or am (amplitude modulation) as their modulation. (in fact most systems today use fm). the pcm or ppm designation is not really about the modulation, but rather about how the information is encoded in the radio signal.

a ppm transmitter must be used with ppm receiver and vice versa. some transmitters support both based on a switch setting.