Installed Car-kits  
They are... devices installed (usually professionally) into your car with the wires running behind the dash mostly hidden from view. Advanced models are connected to your car stereo system to let you hear your cell phone call through the car speakers or provide automatic muting of the stereo when you have an incoming call.

Pros/cons... Installed car-kits are inconspicuous, easy to use and provide very good voice and listening quality. Although installed car-kits still cost more than a headset, their prices have been coming down. If the car-kit uses Bluetooth technology, you don’t have to worry about fitting a cell phone to a cradle in the car. With a Bluetooth car kit, your investment is better protected in terms of forward compatibility.

The Bottom Line - Installed Car-Kits are great for people who spend a lot of time in their cars or really value the simplicity of a truly hands-free cell phone set-up. If you have a Bluetooth phone, it makes sense to get a Bluetooth car-kit.

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Portable Car-kits
They are... devices that plug into your car's cigarette lighter or power outlet, usually with the speaker and the microphone integrated into the same component.

Pros/cons... portable kits are a cheap alternative to a fully installed kit but still provide a hands free set-up. They aren’t as elegant a solution as an installed kit. You can take your portable car-kit with you if you get a new car. Portable kits also make sense if you use rental cars often.

The Bottom Line... portable car-kits are a good option if you want a true hands free kit but can't afford an installed car-kit.

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Wireless Headsets
They are... devices that use Bluetooth technology to replace the cord from the cell phone to the headset.

Pros/cons... wireless headsets provide all the mobility of a wired headset without having to deal with cords. Unlike wired headsets, wireless headsets require a battery source or will need to be kept charged. You must have a Bluetooth-enabled phone or buy a Bluetooth adaptor for your phone to go this route.

The Bottom Line - If you have a Bluetooth enabled phone and like the idea of getting rid of cords, this is the best option for you (especially if you use your cell phone often outside your car).

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Wired Headsets
They are... headsets that plug into your phone. The differences in price tend to correlate to voice/sound quality. There are a few cell phone laws that require one ear free of cell-phone accessories while the car is in motion.

Pros/cons... wired headsets are the workhorses of the hands free world. They’re a cheap choice but they can also drive people up the wall with those cords!

The Bottom Line - wired headsets are a popular choice because they’re cheap. If your phone is not Bluetooth-enabled and you want to be hands free out of the car as well, this may be your best option.