What are the differences between motion files for the Motion Director system, and normal 3D Motion system?

Motion Director is a built-in, separate tool from other animation tools in iClone 8 or above.
If looking into the file suffix, the MD file format is “iMD” instead of the traditional motion format “rlMotion”.

The rlMotion file can’t be turned into an iMD file. However, if you use the Motion Director system, then the animated result can also be recorded into the timeline for motion editing, just as a normal motion clip.

Motion clip can be saved as .rlMotion file. Kindly refer to:
https://manual.reallusion.com/iClone-8/Content/ENU/8.0/51-Animation-Timeline-Editing/Saving_Clips.htm