Moodle lessons and Moodle books are two common ways for presenting written content to students. Both are useful for different purposes.
Moodle books are a great option when you want students to be able to easily navigate through the material. Moodle books have a table of contents sidebar where students can see the titles of every page in the book and track their progress through the book. Students can also click on any of those pages and jump to that point in the book. Moodle books make it easy for students to return to the content at a later date and quickly find the point they were looking for.
Another benefit of Moodle books is that the table of contents allows for both headings and subheadings. Allowing students to see those levels of organization in the way the designer has arranged the content can be a teaching tool in and of itself.
One of the drawbacks of a Moodle book is that all it does is present content. Students do have to click through the pages, and various types of media in addition to text can be embedded (videos, images). But all they are doing in a Moodle book is reading and viewing, which are both passive forms of learning. One workaround to incorporate more active learning is to include a link that takes students outside the Moodle book to a more active type of learning activity (a quiz, a discussion forum, etc.).
Moodle lessons are a great option when you want students to actively engage with the material as they encounter it. Moodle lessons come with a built-in mechanism for asking questions, which can be used to break up the flow of new information. So, for example, you could present information about a topic, then include a comprehension question that students have to answer before they can move on to the next page of the lesson. If the question is an objective one (multiple choice, true/false, etc.), the question settings include a feedback option where you can tell students that they answered correctly, or explain why their answer is incorrect.
The questions also for branching. If students get a question correct, you can direct them to the next topic in the lesson. But if students get a question wrong, you could direct them to another content page that explains the problem in more detail, then you could give them another opportunity to answer the question correctly before allowing them to advance to the next topic.
Another reason you might want to use a Moodle lesson instead of a Moodle book is if you want to control the flow of information. For example, you might want the students to move through a subject sequentially rather than jumping around. Moodle lessons do have the option to turn on a table of contents sidebar (as in Moodle books), which allows students to navigate to later pages. However, that option can be turned off in lessons so that students have to advance through the lesson in order. When the table of contents sidebar is enabled, students can use it to navigate past question pages without answering them. Lessons come with a progress bar so that students can tell what percentage of the lesson they have already completed. The progress bar will not show 100% completion if students use the navigation features to skip past questions. (Note: in a lesson with branching options, students also may not see 100% in the progress bar if the lesson is constructed in such a way that they do not have to follow every branch.)
One of the drawbacks of a Moodle lesson is that it is not as easily accessible after the fact as a Moodle book. If students have completed a lesson and want to reopen it to look something up, they may not have the option to jump straight to the page they are looking for, depending on what navigation options are enabled.
Another drawback is that the table of contents feature in a Moodle lesson (when it is enabled) only allows for one level of headings—it currently does not support subheadings like the Moodle book does.