The first performs a full backup of the client, with the exception of any files listed in
~/.rsync-backup/localbackuponly and ~/.rsync-backup/exclude. Files listed in the former aren't sent to the server because of their sensitive nature (/etc/shadow, ssh private keys, password files, etc.). These are tarred up locally and should be moved onto a floppy. Files listed in exclude are files that don’t need to be backed up at all (cache directories, coredumps, etc.).
The second form simply limits the backup to a few local directories.
While both forms appear to be backing up to the backup servers top level directory, the use of ssh keys forces the backup to start in the /home/220.127.116.11/current/ directory.