Hi everyone, just want to add a bit of info in case anyone needs it.
As far as the "Basic" kit is concerned, the difference is indeed whether you want physical (tangible) materials or not. The download-only and box set versions of Little Reader Basic, Little Math Basic and Little Musician Basic come with exactly the same set of items.
If you're considering getting the Little Reader "Deluxe" kit, that product is only available as a box set as it comes with some non-software teaching materials like 25 storybooks and the Pattern Phonics Flip Cards. The Little Reader software, license key and content files are still accessible as downloadable files from your BrillKids Account - this means you can start installing and using the software itself as soon as you're done checking out at the online store, even before your actual box arrives at your doorstep!
You may refer to this page for a comparison of Little Reader Basic vs Deluxe:
http://www.brillkids.com/teach-reading/whats-in-it.php