What is the difference between VPN and VPN pass-through?

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You will see this feature mainly in home (or small office) Internet gateway devices. This is an excellent question because it confuses a lot of folks who don't know much about the inner workings of VPNs.

A SOHO network device that supports VPN will probably support either IPsec, PPTP, L2TP or SSL VPN technologies. This means that the device actually has an implementation of the protocol running on it and can be used to connect to a central server or VPN gateway; therefore, a VPN client would not be required

On the other hand, a SOHO network device that supports VPN pass-thru simply means that it can support "passing through" packets that originate from VPN clients (typically on laptops or PC's) out through a VPN server on the Internet. A special feature like this is needed because: 1) these SOHO devices are involved with NAT and PAT, 2) VPN protocols like IPsec (the data path is called ESP) doesn't have a specific port number for the device to multiplex the port address translation back to your laptop or PC 3) that's why this feature enables some special processing of packets that are IPsec ESP data packets and allows the device to keep a table of active connected VPN tunnels.