Linear design is a process that follows a step-by-step process. It has the advantage that it is easy to follow and each stage is completed at a time. It does not allowfor improvements in design and lacks flexibility.
Iterative design is a cyclic process, and involves stages being repeated many times. It allows ideas to be designed and tested and improvements to be made coninuously. Eventually the best possible outcome is generated. It has the advantages that it encourages creativity and there are many opportunities to improve the design. It is very time consuming however and can be expensive because of this.