With the dynamic simulation or the assembly environment, the intent is to build a functional mechanism. Dynamic simulation adds to that functional mechanism the dynamic, real-world influences of various kinds of loads to create a true kinematic chain.
Though both have to do with creating mechanisms, there are some critical differences between the dynamic simulation and the assembly environment. The most basic and important difference has to do with degrees of freedom.
By default, components in Autodesk® Inventor® Simulation have zero degrees of freedom. Unconstrained and ungrounded components in the assembly environment have six degrees of freedom.
In the assembly environment, you add constraints to restrict degrees of freedom.
And, in the dynamic simulation environment, you build joints to create degrees of freedom.