Differences between body types:

• Static
• Kinematic
• Dynamic

1. Static Body: 

A static body does not move under simulation and behaves as if it has infinite mass (in another words it keeps all the time the same position, won't react for any forces such as gravity etc) Example of usage: grounds in side scroll games.

2. Kinematic Body: 

A kinematic body moves under simulation according to its velocity. Kinematic bodies do not respond to forces. They can be moved manually by the user, but normally a kinematic body is moved by setting its velocity. In another words it won't interact with dynamic bodies for example, won't react for forces like gravity etc) Example of usage: moving platform, which is constantly moving for example in left and right direction like in many side scroll games.

3. Dynamic Body: 

A dynamic body is fully simulated. They can be moved manually by the user, but normally they move according to forces. A dynamic body can collide with all body types. Example of usage: moving character (player) or for example bullet. 

Important Notes:

Always use proper body type (depends on needs) for example do not use dynamic bodies where its not necessary (First of all they will simply fall down if proper gravity is set) and what's most important - they are more 'performance costly' - obviously most 'performance friendly' are static bodies. Its also worth to mention, that you may change body type even after creation of this body.