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An RPM is a package for systems that use the "rpm" package manager (which, Fedora does).
A *.tar.gz file is usually source code that has to be compiled; it is just a compressed archive format.
Now, I have to apologize as I do not use Fedora, RedHat or CentOS, but I have no idea what a YUM file is; I know "yum" - the command - is used to install packages from the command-line, but I don't know/didn't know if it was an actual file format of some kind, now.
Yum is actually the pkg mgr Sw for .rpm style pkgs. If you use this cmd, it will automatically take care of dependencies for you.
The prevous tool before yum was known as up2date. http://kbase.redhat.com/faq/docs/DOC-2531
What's the difference between YUM TAR.GZ and RPM when I have to download an app to install?
You ask 'what are the differences', but I think that all that you need to know is that they are different. Packages (roughly, applications plus the libraries that they need) are commonly supplied in these formats (and .deb...let's not leave them out).
What you really need to know is that whatever distro you are using uses the package format and system that it uses and that's the one that you want. The exact differences between them are essentially irrelevant for this purpose; you want the one that you want.
...when I have to download an app to install?
In most cases, your distro will maintain a repository (several, actually) which contains packages lovingly crafted for your system. The distro will almost certainly have some app for grabbing packages (installer/updater/synaptic/yast/yum/zypper or whatever) from their repositories and installing them on your system. you should use it whenever possible as it is:
less likely to cause problems
Of course, if you feel that you really need to take another approach, that would be possible, but why would you do it?