When we think about distortion products we are generally referring to the harmonic kind. Harmonics are naturally occurring byproducts of sound: a plucked string will generate the intended frequency (called the first harmonic) and then higher versions of that note, each slightly less loud than its predecessor. These higher frequencies are all integers (whole numbers) of the note. For example, if the note is 50Hz, the first three higher harmonics are (times 2) 100 Hz (2nd harmonic), (times 3) 150 Hz (3rd harmonic), (times 4) 200 Hz (4th harmonic).
Harmonic distortion follows these same rules with one difference. It is unwelcome. When we pluck a string we expect harmonics. When we playback a recorded version of the string pluck, we want all that was there without any additional harmonics added. Whatever extra we get is distortion. Unwanted sound.
Intermodulation distortion is sort of the same as harmonic distortion except we require two or more frequencies to generate these unwanted sounds. With IM two or more frequencies join forces to form additional components at frequencies that are not just clean integer multipliers of either, like harmonic distortion, but also at the sum and difference frequencies of the original two frequencies and at sums and differences of multiples of those frequencies.
IM distortion is much harsher on the ear than harmonic distortion. We are much more used to the addition of ordered harmonics and, in some cases, these are pleasant additions to the sound. IM on the other hand tends to grate on us like nails across the blackboard.
Modern well-designed equipment really doesn’t have much in the way of IMD to be concerned with, but I thought you might want to know the difference between the two.