kmalloc allocates physically contiguous memory, memory which
pages are laid consecutively in physical RAM. vmalloc allocates
memory which is contiguous in kernel virtual memory space (that means
pages allocated that way are not contiguous in RAM, but the kernel
sees them as one block).

kmalloc is the preffered way, as long as you don't need very big
areas. The trouble is, if you want to do DMA from/to some hardware
device, you'll need to use kmalloc, and you'll probably need bigger
chunk. The solution is to allocate memory as soon as possible, before
memory gets fragmented.

If you only allocate small chunks (page or few pages), just use kmalloc and don't worry about details. :)