What is the difference in cut and loop piles?
Cut pile tufting machines automatically cut the yarn at the end of each rotation, this leaves you with a "shag" like texture.
Loop tufting machines punch the yarn through the primary tufting cloth in one continues cycle, giving you a more "nubbly" texture. Additionally you need to cut the yarn when you are ready to remove the gun from the cloth.
Here is a video that demonstrates the difference.