Differences between HB pencils
H and B relate to the hardness or softness of the pencil's graphite. &quot;H&quot; stands for &quot;hard&quot; and &quot;B&quot; stands for &quot;black&quot; with &quot;F&quot; right in the middle between HB and H... though, the source of the lettering seems to be debatable according to Wikipedia - H stands for &quot;Hardtmuth&quot; (the surname of the owner of an art supply company) and B stands for &quot;Budweis&quot;, the town the pencil company was relocated to but &quot;hard&quot; and &quot;black&quot; are probably more useful to remember.
A &quot;number 2 pencil&quot; as we (in the US) are often told to use for filling out multiple choice answers on Scantron sheets, is right in the middle, the equivalent of &quot;HB&quot;... though, according to this site, there's no &quot;industry standard&quot; so one company's HB may not be the same as another's. This is also explained in the Wikipedia article linked above, which notes that on some scales, the US equivalent of HB is a #2 pencil, while other manufacturers use the equivalent HB=2½.
As a general explanation of the differences between the grades, pencils.com shows the following image:

As you can see in the image, the higher the H value, the lighter the result but the finer the point, while at the other end, the higher the B value, the darker the blackness of the graphite and wider the point.
This site has some great guidance on what the benefits of each are:

H leads are extremely smudge-resistant and give cleaner lines, making them useful for things such as outlines, technical drawings, light sketches, and even watercolors. Left-handed pencil users can also take advantage of smudge-resistant H leads. On the downside, hard leads tend to be scratchy, especially as you move up the scale.
B leads are smooth to write and draw with. They smudge easily, but are readily erased. They're perfect for pencil drawings as artists can take advantage of the brush-like expressions, especially in the higher B grades. Animators in particular enjoy using 10B over animator paper because it writes like butter, creating nice, quick, heavy lines with no friction.