Assignment UDFs are categories applying to resources and can differ from project to project. Resource UDFs are categories applying to resources in general and will remain the same from project to project. The best example I can think of are locations of your labor resources. Say you have projects in various locations throughout the country and your labor resources travel between projects or activities often. You could create UDFs for the location each resource will be traveling from. "Home Location" would be a resource UDF because the home location of the resource remains the same regardless of the project, but "Departing Location" could be an assignment UDF and might vary depending on which project he is travelling to and when.