What's the difference between Pro Tools “standard-software-only" and a PRO TOOLS HD SYSTEM?
The short answer is that HD systems are a combination of an advanced feature-set version of Pro Tools software and specific EXTERNAL HARDWARE, besides converters and audio interfaces.
Rather than leave all the processing to your computer, HD’s hardware is composed of DSP acceleration chips, which offset many of the computing tasks required by the software, famously supporting its Time Division Multiplexing (TDM) and now AAX DSP plug-in formats.
The benefits here are obvious, In addition to lowering your recording’s latency to essentially imperceptible levels (necessarily for multi-track recording), the acceleration chips gave you the ability to monitor through TDM plug-ins; a feat that might be commonplace now, but was ground-breaking at the time.
Outside of the added punch of more processing power (including not having to rely on your computer for a good chunk of plug-in processing), the Pro Tools software that completes the HD SYSTEM offers some advanced features not found in the “standard” host-based versions of Pro Tools, historically giving you access to input monitoring (though this feature trickled down to all versions of Pro Tools 12), Surround Mixing, Advanced Video support, and many others.
The software/hardware combination one-two punch also helps reduce latency, an integral feature when overdubbing audio and mixing with outboard and external gear in addition to run both TDM and NATIVE plug-ins.