The geometric network is used to model things like utility networks, drainage, or any other network where the commodity does not have free will.
Network dataset is used for networks where "an agent" can choose the path, such as transportation networks.
There a description here (scroll down to the What is a network? section):
Geometric networks (utility and river networks)
River networks and utility
networks—like electrical, gas, sewer,
and water lines—allow travel on edges
in only one direction at a time. The
agent in the network—for instance, the
oil flowing in a pipeline—can't choose
which direction to travel; rather, the
path it takes is determined by
external forces: gravity,
electromagnetism, water pressure, and
so on. An engineer can control the
flow of the agent by controlling how
external forces act on the agent.
Network datasets (transportation networks)
networks—like street, pedestrian, and
railroad networks—can allow travel on
edges in both directions. The agent on
the network—for instance, a truck
driver traveling on roads—is generally
free to decide the direction of
traversal as well as the destination.