What is the difference between standard metrics and participation metrics?

Your explanation didn't mention "Pages." I think the main advantage of participation metrics is that you can use them in a Pages Report and get a full credit count when using a participation success metric.

To me it helps having a concrete example to wrap my head around it.  Like Lisa mentioned Pages report is a good example.  In SiteCatalyst (reports and analytics) pages is a linear allocation.  What this means is that if I make a purchase of 50 dollars, and I saw 5 pages, each page will get 10 dollars of revenue.  So, in the report Page A would get 10 dollars and B 10 dollars etc.  However if I add in the Participation version of Revenue now what I see is Page A gets 50 dollars and page B gets 50 dollars. 

Essentially like the Admin said everything in the visit before the event happens get credit.  In pages that is all the pages.  In Campaigns, that's all the campaigns assuming there is more than one.  In Site Sections that could be like 2-3 site sections etc. 

I hope that helps,

Seth