The Time & Material project type is intended for situations where you are not sure how much time a particular project will take and are unable to define the amount (e.g. hours) for your customer beforehand. In this case, the amount is always entered as "0" and the actual amount is defined when you send out the actual invoice after the service has been delivered.
Fixed price projects are for cases where you are able to define the amount before you start delivering the service. Note that this does not mean that you are not able to change the amount later on as you can still make changes to the invoice later.