What is the difference between two models of situation awareness?
Short answer

Endsley considers SA to be a product. Smith and Hancock argue that SA is a process. Deciding for a definition is important, since it can determine the focus of the research and methodology. 

Long answer

The Three-level model proposed by Endsley considers SA to be a product. In other words, SA is a mental picture that can be tested by testing an operators knowledge about the current situation. On popular mean of doing is the Situation Awareness Global Assessment Technique (SAGAT; Endsley, 1988). With the SAGAT, researchers freeze the task (in a simulator) and present the operator with a set of queries, that cover each of the three levels. Examples of these questions in the domain of train traffic controlling is shown in Table 2 (taken form Lo, Sehic and Meijer, 2013). 



The perceptual-cycle model argues that SA is a cyclical process of attention, in which perception, knowledge, anticipation and action-taking take place concurrently, in order to generate a `product of consciousness', that is, an understanding of the current situation (see Figure 3, taken from Smith and Hancock, 1995). The product can not be not be seen separately from the process, however; The perception of relevant information will lead to a better understanding, but a better understanding will also direction your attention. 

Measuring one's SA as a process implies measuring how well the acquisition of SA is over time. This has, among others, been done with tools such as eye tracking and EEG (For a review, see Salmon, 2006). The perceptual-cycle model does acknowledge the existence of a product of consciousness (and the testing of it with the SAGAT), but this provides an incomplete picture.