Erlang B is used in a blocking system and Erlang C is used in a queueing system. With Erlang B the assumption is that an arriving call is either accepted into the system (is assigned a resource) or it is lost (blocked, sent to treatment, etc.) With Erlang C a call can queue for a period of time to see if a channel becomes free. If the time expires, the call is blocked. Erlang B is used in most public telecom networks (trunk provisioning, cell site provisioning, etc.) Erlang C is used in some networks where people call in to speak to a customer service rep (or something like that.)
I hope this helps.
Chris