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What's the difference between Wubi and a regular installation?

I am aware that ubuntu can be installed on a machine in two ways keeping windows os in parallel, probably the installation is called inside windows and outside windows ? (Please correct me if I am wrong)

My question is which approach is better and why? Will there be any difference in the behavior of processes or any other change at system level?

What are the advantages/disadvantages of one approach over the other?

-Thanks