Now there are many ways of heating your home and your water, but the 3 more common gas ones are the 3 shown below, Traditional, Combi boiler and a System Boiler
The Tradition system still comes in different shapes, but they all work in a very similar fashion. A boiler heats water then by gravity or pump that makes its way to the hot water cylinder to circulate through the cylinder and back to the boiler. You can also have the added safety of an immersion heater so if your boiler does fail the cylinder can still be heated to give you hot water.
Now the heating can come from the boiler or from the hot water held in the cylinder.
These are normally fed by 1 or 2 tanks in the loft providing a constant supply of water to the tank and heating/boiler.
A System Boiler is almost a traditional boiler or so it looks, but they are different. A system boiler gets away with the storage tank in the loft it does not have a constant supply of water being fed to it or the heating. This type of system is pressurized meaning it needs water manually adding but it runs more efficiently and is a great upgrade from a traditional system in a large house.
You would also be able to have a immersion in you're cylinder on this type of system.