Broadly speaking, there are five main types of boat on the inland waterways: narrowboats, widebeams, Dutch barges, converted barges/lighters, and cabin cruisers.  Here's a very basic guide to get you started.

Narrowboat

Narrowboat, Erdstone Aqueduct, Stratford-upon-Avon Canal (David Stowell)These are the classic canal boat - long and narrow, usually all-steel but sometimes with a fibre-glass cabin (there are even one or two narrowboats with concrete hulls - strange but true).  The canal and the narrowboat were designed around each other, but not all canals can take the longest boats (up to 72 feet!).

Best on: Canals
Best for: People who can live with less and in a smaller space.
Not so good on: Tidal rivers (but still possible).

There are a few sub-types of narrowboat:

Traditional ('trad') stern: This is what most people think of when they think of a canal boat - usually a long boat, often with beautiful lines in the water, and always with a tiny back deck - room enough for one person to steer and that's it.

Cruiser stern: This has a traditional narrowboat design at the front but the stern is built to have a few people standing on the back deck.  This is a good choice for the social boater.

Semi-traditional or 'semi-trad' stern: This one looks like a trad boat from a distance but it has a semi-enclosed back deck, a bit smaller than a cruiser stern.  It's a hybrid of cruiser and trad styles.

 

Widebeam

Widebeam, Kennet & Avon Canal (Graham Horn) [detail]

'Wide beam' generally means any boat or lock wider than 7', but 'a widebeam' is a boat in the style of a narrowboat but (usually) twice as wide.  The interior space of the longer version of these boats approaches that of a small flat.  The extra width allows different furniture layouts; the trade-off is that this boat is harder to move around, especially if it's also very long.  The width will also restrict the number of canals you can use, as the locks and bridges on most canals, particularly in the Midlands, are only wide enough for a narrowboat.

Best on: Wider canals and rivers.
Best for: People who need or want a lot of space.
Not so good for: narrow canals.

Dutch barge

 Dutch barge, Thames (Graham Horn)These are beautiful, old, all-steel, ex-freight boats with lovely lines in the water.  Most have large, powerful engines and some were also built to take a sail.  But, as they were not built for the waterways of Britain, they can suffer from grounding in shallow canals and are usually pretty hard to get under the lower canal bridges.  The draught (i.e. how deep the boat is in the water) and air-draught (i.e. how high it is out of the water) need to be considered when choosing one of these.  Their hulls are often built of thinner steel than a traditional narrowboat, and some of these boats are very old - even a century old - so you'll want to get a survey before you buy.

Best on: Wider and deeper canals and rivers (including tidal rivers)
Best for: People who want a lot of space and have an eye for a beautiful boat.
Not so good on: Narrow or shallow canals.

British barge/lighter

Canal barge, Bridgewater Canal (Unknown photographer)This is the largest type of boat for the inland waterways.  It's a converted freight boat, made by taking an old mud hopper or a Thames lighter and welding a cabin on the top.  In fact, most barges will barely make their way through the canal system, so they tend to be favoured by those who have a residential mooring and don't want to cruise very much. Before you buy one check it fits where you plan to go!  These boats are built with hefty steel but as they are old and typically weren't looked after well during their working life, the hull will still need looking at before you buy.

Best on: Rivers - also on canals if used as a static houseboat.
Best for: People who need or want the most space possible on an inland waterway.
Not so good on: Canals if you want or need to move around.

Cabin cruisers

Cabin cruiser, Great Western Canal (Devon) (Roger Cornfoot)Whereas other types of canal boat have their origins as working boats and barges, cabin cruisers were made for fun.  From 'cosy' boats just a few feet long built for the odd weekend away, to purpose-built liveaboard gin palaces, the cabin cruiser market is pretty diverse.  Usually, these boats are fibreglass (GRP - glass-reinforced plastic), which makes them lightweight and manoeuvrable, but the smaller ones can be difficult to control in wind.  They are also vulnerable around heavy, all-steel boats, such as when sharing a lock.  A main difference from the other boat types is that the driving position is normally inside the boat.  But don’t worry, you still get wet at the locks if it’s raining so you won’t miss out.  Although these boats don't fare particularly well on the canal, they are usually much cheaper than a steel narrowboat.

Best on: Rivers (preferably when it's not too windy).
Best for: People on a budget - the weekender-type boats are the cheapest way to get on the water.
Not so good on: Canals.

Does size matter?

Not as much as what you do with it.

Big boats are often the most elegant, but beware the seduction of size.  If you're a hoarder then it doesn't matter if your boat is 70' long - you'll soon fill it, and you'll still be pootling the thing along for miles to find a winding hole (a turning point) to turn round.  What's more, most of a boat's costs - including buying price, licence, insurance, mooring fee and sometimes dry-docking/cranage fee, are calculated on length.

A shorter boat has more than you might think to recommend it.  You can turn around a 40' boat pretty much anywhere, for example.  Shorter boats are also easier to steer, easier to moor on busy stretches, and easier to maintain.  And they're cheaper to buy!

Just sayin'.