A retrofit involves working within the existing frame and replacing the sash and the glazed unit with a whole new window.
A Complete Tear Out
This is where the entire window assembly is removed right back to the rough opening and replaced with a completely new window, including the frame.
Which Is Better?
Generally, a complete tear out will result in a more energy efficient installation as insulation, air barrier and weather seal will all be redone. This will ensure minimal heat loss and air leakage around the perimeter between the opening and the frame.