Balanced means it will enforce throttling and other power savings techniques to everything it can. Power savings settings can and are different between AC and DC states.
Some of the items that are affected by this.
The hard drive, Internet Explorer, slide show backgrounds are paused in balanced, the wireless nic, time until sleep on the system, usb suspension, the graphics card, NIC link state, CPU throttling min and max amounts, display brightness, multimedia playback, java, video quality, battery notifications and actions.
Balanced means the system runs with a balance between power saving and performance. High performance means no throttling of resources and highest quality or in other words power saving isn't important which is often the case when power is plugged in on a laptop. You can also create your own custom power plans if the default ones do not suit your needs.