I dont get the difference does it mean the code will have to be different?
also I have a USB parallax rfid reader and a USB arduino duemilanove If I get a USB host sheild are these compatible?
does it mean the code will have to be different?
No it is just the way you physically connect it to your computer, through the USB or the serial port that is not fitted on modern computers. Serial is cheaper.
You might use a USB Host Shield like this:
SparkFun USB-C Host Shield - DEV-21247 - SparkFun Electronics to talk to a USB device. But you need to write a driver.
However it looks like the USB version of the RFID reader just adds a USB to serial converter, so that just adds complexity. I would just use serial.