All "oriental" rugs are made using the same type of vertical loom. The loom is outfitted with vertical strings, known as the "warp." Then, the weaver creates the rug by weaving wool (or silk) through the warp threads, from left to right. These strands are known as the "weft." (and easy way to remember the difference: the weft goes "weft" to right!) All rugs have both a warp and a weft. The difference between knotted carpets and woven carpets is, knotted carpets ALSO contain lines of wools that are attached to the warp, between the weft strings. (see above illustration)
In a knotted carpet, warp and weft strings (of cotton or wool on almost all rugs) are "hidden", and the wool looped into the carpet and held in place by the weft strings forms the pattern of the carpet. In a "kilim" rug ("kilim" means "flatweave"), the warp strings are again hidden, but this time the design of the rug is created by weaving wools over the top of the warp strings, essentially wrapping them in wool. Which is "better?" well, it's really a matter of preference. That said, there are some differences in construction worth noting.
There's nothing "quick" about creating either a hand-knotted carpet, or a hand-woven kilim. Both are painstaking processes that, if done well,require both patience, and skill. Having adult weavers making your rug are not only better for humanity, they're also MUCH better at creating good pieces! (for more on the abhorent practice of child and slave labor in the rug industry, please see Fair Trade Considerations). As a general rule, making a knotted rug requires more labor hours than making a kilim. Thus, as a general rule, knotted rugs will be a little more expensive than flatweave carpets. However, don't forget: there can be other facotrs driving the price of a rug, too. Handspinning the wool for a flatweave adds many, many hours of labor. So does hand-dying that wool. As always, there are many factors in play with pricing any carpet, and for every general rule, there are 5 exceptions!
It is also true that as a general rule, knotted rugs are more durable than kilims or other types of flatweaves. The knot structure provides a little extra protection to the warp, which is the foundation of the rug (see above). However, if you have a passion for kilims (we sure do!), don't let that dissuade you. we're talking "will it last 100 years, or 200 years" here!