Hi there! The difference is that when adding a camera under Network Camera you use a predefined template for that camera model. Usually it is for jpeg or mjpeg. It maybe is not the optimal settings, but it works very very often and is therefore very easy to use which is the benefit. Adding a camera using Custom URL you need to know exactly how to connect to the camera and therefore you can also control what you want like resolution, compression, audio … etc. You gave a good example yourself above of the resolution. The difficulty to keep up with the templates are that many manufacturers develop their cameras and add new features and increase resolution. They develop new firmware and when you download that and if the firmware is not backward compatible there will be problems. The serious manufacturers make their firmware backward compatible to avoid problems since today the most common way to connect is by using a template.
It is also important to know that the increased resolution use a lot of cpu load and network traffic. Therefore, many vendors limit the resolution for the mjpeg stream and for the higher resolution they use h.264. Unfortunately, many manufacturers sort of hide how to use rtsp to connect to their camera in my opinion. Sometimes it is a big detective work to find the rtsp and a lot of trial and error. One can see the formation of the rtsp stream in some camera manuals, but most of them do not have that. Therefore, the ONVIF initiativ was created for some years ago trying to sort this out. Today, many cameras are ONVIF compliant, but then again that have also som limitations as adding a camera with a template apart from that ONVIF is much more complex.
So, in short adding a camera with a predefined template is easy and it works very very often which is the main benefit I would say. Using Custom URL you can control it all (mostly). Most likely we will see much more use of adding cameras using ONVIF.