Type keyboard is closer to a regular keyboard with actual physical keys. Touch keyboard is almost flat.

http://www.microsoft.com/Surface/en-US/accessories/home

>What's the difference between the touch keyboard and the type cover?
>
>>About $100. But, it comes with blue tooth, so you could go that route for a keyboard, but less portable. The touch keyboard isn't bad. I wouldn't use it exclusively, but it's much better than I expected. I haven't tried the Type cover.
>>
>>>"....the 128 GB Surface Pro unit will be priced at $999; the prices do not include the Touch or Type covers...."
>>>
>>>That sounds like a good price to me although I assume the touch/type cover will add a few bucks to it.
>>>