Difference Between Product and Items

In Simple Words 

Products : Product is a group of items which exhibit same attributes. we can say Shirt is a products, but a shirt of red color of size 44 is a item. So it is clear in this example that there are two attributes size and color which belong to this item. And we can also say , that items belong to a particular product exhibit the same set of attributes.

Items : As Info center says - An item is a tangible unit of merchandise that has a specific name, part number,size and price. For example, a 44 size shirt with red color is an item for the above item.

Actually it is not required to associate Item with Products, In Commerce we do so to maintain a consistent view, by doing this we are able to easily manage the items through Product Management Tool in WebSphere commerce server.

So It is clear now that Product is not a physical entity which we can purchase, but it is Item which we potentially purchase and add to cart.

The relationship between Product and Item is modeled in CATENTREL table.
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Actually we are following a generic navigation technique in the site
[ROOT CATEGORY]  --->[PARENT CATGEORY] ---> [CHILD CATEGORY] ---> [PRODUCT] ---> [ITEMS]

Below are some of the important tables through which we can get the details of the item which we are going to purchase:

CATENTREL = has the relationship on the parent catentry[PRODUCTS] and child catentry[Items].

CATGPENREL = has the information on the target catalog entry with the catalog and category.i.e;
the item belong to which category and catalog.

CATGRPREL = has the information on the relationship between the CATEGORY or CATGROUP, like it says which is parent and which is child.

CATTOGRP = has the information on relationship of CATALOG_ID and ROOT CATGROUP [category]
NOTE: Categoy and catgroup are synonyms in commerce

STORECAT = has relationship on store with catalog and also says that whether the catalog which is referenced to the stores is master catalog or not.

look into these three data models in info center for a better understanding:
catalog data model
catalog group data model
catalog entry data model