A split-system air conditioner splits the hot side from the cold side of the system, like this:
The cold side, consisting of the expansion valve and the cold coil, is generally placed into a furnace or some other air handler. The air handler blows air through the coil and routes the air throughout the building using a series of ducts. The hot side is known as the condensing unit and is located outside the building.
The unit consists of a long, spiral coil shaped like a cylinder. Inside the coil is a fan, to blow air through the coil, along with a weather-resistant compressor and some control logic. This approach has evolved over the years because it is low-cost and also because it normally results in reduced noise inside the house (at the expense of increased noise outside the house). Besides the fact that the hot and cold sides are split apart and the capacity is higher (making the coils and compressor larger), there is no difference between a split-system and a window air conditioner.