Retrofit is just all the parts of the lights and you put them together yourself in your own existing hood that you have on your tank.
The other alternative is to buy the VHO's already in a hood which will then sit on top of your tank.
<a href="http://www.jlaquatics.com/cgi-bin/store.cgi?page=icecap.shtml&&cart_id=" target="_blank">http://www.jlaquatics.com/cgi-bin/store.cgi?page=icecap.shtml&&cart_id=</a>
Follow that link and go to the bottom of the page. Look at the PFO/IC Retrofit and the PFO/IC Combo Fixtures. You can see the differences. The retrofit has no canopy with it, you have to install it into your existing canopy, or build one for it. The combo comes with the fixtures just like the retrofits except that the canopy is included too. The other main difference is the price. Retrofit is MUCH cheaper, $300 cheaper on that site, but please note, those prices are in CANADIAN funds.
Hope this helps you understand it, I was totally stumped on lighting just like you were.