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What is the functional difference between given two shipping policy in openerp

=> Deliver each product when available => Deliver all products at once

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Deliver each product when available - the delivery order will become 'AVAILABLE' as soon as a single product on it is available.

Deliver all products at once - the delivery order will become 'AVAILABLE' only when ALL products on it are available.

Think of this as also allowing, preventing split deliveries and/or back orders.

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As far as I know the shipping policy working somethings likes..

First the options are not restrict you to create back orders.

This one affect your expected date. 

Suppose on sales order you have two products with following config,

Product 1 : 10 Days lead time

Product 2 : 20 Days Lead time

- if your sales order policy "Deliver each product when available" it consider minimum date (order date + 10 Days)

- Otherwise it takes max date (order date + 20 days)

This shipping policy affected into sale to delivery flow.

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