Let me start by saying I love both. Yes, it's possible to love and use more than one type of period protection. Just like menstrual cups pair so nicely with period underwear or reusable pantyliners. Each product has pros and cons and personal preferences play a part too.
The concept is simple, just as many people are used to disposable pads, the idea is the same however you toss them in the washer rather than in the garbage after you use them. They have a lower price point than period underwear however you will likely need more of them because you will change them regularly. If you are someone who isn't used to wearing pads in general then they can seem a little bulky (depending on the size) until you get used to them but changing them is a breeze, unsnap it from around the crotch of your underwear and snap on a clean one! With changing them regularly it's nice to have a clean fresh start again whenever you want it! Reusable pads also come in various sizes and fabrics so you can find the best combination for your preferences.
Again the concept is simple, they are underwear, just with extra layers in the middle for absorption (and a waterproof layer)! They are more pricey than pads however each pair (speaking for our own brand Tree Hugger Cloth Pads) can hold the same amount of liquid as 9 tampons. Many people can go all day wearing them before needing to change them. Changing them isn't as convenient as pads if you are out and about but with planning you may only need to change them at home. Washing them is the same as reusable pads (which is also the same as regular underwear FYI). They are a much thinner and trimmer option for maximum period protection and again speaking for our own Tree Hugger Cloth Pads Period Underwear they are more leakproof than reusable pads. They truly are a "Game Changer" when it comes to handling your period.
Personally, I use both reusable pads and period underwear as I find I like each for different uses. For nighttime, I LOVE OUR PERIOD UNDERWEAR! They are so thin and comfortable for night while still keeping me protected. For heavy days, I like reusable pads because I like changing them and starting fresh a few (sometimes many) times a day. Yes, the period underwear can hold up to my heavy flow but I just like changing my pad every time I go to the bathroom for cleanliness and taking off my pants to change my underwear every time is less convenient. Just to be extra I even use pads WITH my period underwear because the underwear is so comfortable and I can just snap out new pads during the day and then no pads for at night, just the period underwear. For light days I sometimes use pads, sometimes the period underwear, it depends on when I last did laundry. For exercising, period underwear all the way!
So as you can see, making me choose between the two is impossible. If you haven't yet I highly recommend you try both and see where your preferences take you.