It is normal to classify all kinds of smaller heaters as vented space heaters or unvented ones. The difference is that one needs a flue to the outside - this is the vented, the other type just sits in the room.
Of course if you need to vent the space heater then it makes sense to place it near an outside wall so the chinney or vent can be knocked through to the outside. So you could say there is a little less flexibility in placement.
Generally people use space heaters because they do not have a need for full central heating, or because they want to boost the system they have with a little extra local heat.
Why is do you need a vent at all? Basically it is a safety issue - the gases produced by propane space heaters (for example, this applies to other fuels like kerosene) reduce the oxygen levels and can cause death in a worst case scenario.
New unvented models often have sensors that cause the unit to cut out if danger levels are reached, but the antique kerosene heaters that people are so fond of will not have this feature.
So there is at least one good reason to go with vented if it is any more than supplementary heating you are looking for.