RedNAND is another form of Emulated NAND, it's performance and functionality is near identical to that of EmuNAND (Gateway's Emulated NAND) but RedNAND can save ~600MB of space on a New 3DS and is required for some 2DS's that have strange NAND sizes.
If you use a Gateway card or plan to, use EmuNAND. if you do not plan on using Gateway, choose RedNAND.