Basically the way this breaks down is that most of the amps that are physically manufactured, and the ones that are modeled here have what's called overdrive, or simply "drive". What this was designed to do is slightly different than what a distortion pedal will do in the outside world.
Overdrive is basically a way of sending more power and signal (voltage) through the vacuum tubes of many older amps and essentially "dirtying up" the sound that is sent to the speakers. Solid state amps have been emulating this for a long time, but generally sound a lot thinner. This is one of the big drivers for the "Tube vs. Solid State" war that has been waging in the guitar world since the dawn of time. lol.
Distortion is a manipulation of the signal coming from the guitar (in most cases) in that it alters the original signal's wave signature to incorporate more rapidly occurring peaks in the signal flow, hence breaking the wave pattern up and creating a "chunk", or "buzz" effect to the guitar's original signal prior to hitting the amp.
Both have similar effects on the sound of the guitar's signal, but you may notice differences in the way they sound. For overdrive, or drive it will be more "rumbly", whereas with distortion it will be a tighter, nastier "buzz saw-like" aspect added to the sound. Check them out with various levels without the other added, and then decide how much of each you would like in the overall sound you're looking for.
The two can be used together, but be careful of the levels of both as too much of any one of them can create some unintelligible results. If that's what you're going for, however, go for it. The distortion you get as FX1 will act on either the clean signal from the guitar BEFORE it gets to the amp where it can be overdriven, or after the overdriven sound from the amp. It's your decision, ultimately, but they can produce very different results depending on where they land in the signal chain, and how much of each is applied.
Hope this helped.