What the differences are between the Heap Size and the MaxPermSize ?

First off, what is the JVM Heap? The heap is memory that's been allocated to store Java classes and objects. The JVM heap is split up into several areas and newer/older objects are shuffled between the sections based on their age and use. The shuffling of object occurs during Garbage Collection, a process which also discards objects which are no longer used.

That's a description of the heap, but what about this other setting set with -XX:MaxPermSize? Turns out this sets the size for something called the "Permanent Generation".

The permanent generation is used to hold reflective of the VM itself such as class objects and method objects. These reflective objects are allocated directly into the permanent generation, and it is sized independently from the other generations. Generally, sizing of this generation can be ignored because the default size is adequate. However, programs that load many classes may need a larger permanent generation.

So the permanent generation contains information about the objects in the heap. Ah-ha! Now we can start to understand how these two numbers are related to each other. The heap stores the objects, and the permanent generation keeps track of information about the objects. Consequently, the more objects there are in the heap, the more information there is to be tracked about them, and the larger the permanent generation needs to be.