long story short, an inner rotor kit is a very small, light replacement flywheel and stator that replaces the stock flywheel and stator.
An outer rotor kit is the same thing, just slightly larger.
Neither increase HP output, but both allow the engine to rev quicker. The IRK however, having such a minimal flywheel mass, thus rotating mass, drops the torque output drastically, and is thus suited to a more skilled rider who can feather the clutch when required and keep the motor on the boil.
The ORK still has a reasonable amount of flywheel mass, so it doesnt lose as much torque, and is better suited to lesser skilled riders.
The ORK also has far greater range of timing adjustment...
That's about as short and simple as it can be put, while still making sense..