
via POWDERMAKERCREEK
So you’ve read up enough online and consumed enough craft brews and friend’s homebrews and you think you are actually ready to take this passion to the next level….the big step…. the first batch! Now that you are ready to take the plunge its time to decide if you will start with all-grain or extract based brewing. The end product will be very similar to the average craft beer consumer, but the means of getting there and the fine details are very different.
Extract Brewing

via Beer Geeks
In extract based brewing all or most of the needed grain sugars have already been extracted into a readily available syrup like substance at your local homebrew shop. Usually, these extracts come in a narrow range of choices but can be mixed and adapted with partial grain additions to create different malt profiles in the finished product.
The main benefit of extract brewing is the large cost reduction up front because less equipment is needed. Secondly, extract brewing is much simpler and there are far fewer areas for things to go wrong, and the process takes significantly less time.
All-Grain Brewing
The main difference between all-grain and Extract Brewing or Partial Mash brewing is that in an all-grain brew, the entire volume of unfermented beer (called wort) is created by mashing crushed Malt and running hot water through the grain bed in a process called lautering. via brewwiki

via Beer Dude
Arguably the biggest advantage of all-grain brewing is the complete and total control over the content of the final product. Any number of grains of all varieties can be mixed to attain a specific taste profile unlike extract brewing. Aside from control, all grain brewing is actually considerably cheaper than extract brewing. For example, when I first switched from extract brewing to all grain brewing my costs per beer dropped about 40%(but my labor and equipment expenses went up).
You can make great brews via either method of homebrewing, and more complexity can be added to either method through use of hops. Stay tuned for my in-depth all-grain and extract brewing writeups coming soon. Follow me on twitter @Tanner_Brews for more.