NGS vs third-generation sequencing - (Aug/15/2018 )

You have basically understood the difference - Illumina (2nd generation) and the like provide many many short reads - the maximum they can do is about 300 bp, after this the error rate increases. They are basically massively parallel Sanger sequencing - each base added on sens out a fluorescent signal that is interpreted by the machine based on the color of the signal. There is much more complexity to it than that, but it's an analogy that sort of works. 

3rd gen sequencing is based off a two different technologies, which can be divided into pore based (Oxford Nanopore) and zero-mode waveguide (PacBio). The pore based technologies work around changes in electrical current with the pore expanding and shrinking as each base is fed through the pore by a molecular motor. PacBio uses a tiny well called a zero-mode waveguide (ZMW) with a polymerase attached at the bottom.  The ZMW is a small area that is constrained in size such that you can observe a single nucleotide at a time in the volume. To do this the polymerase attaches a fluorescent tagged nucleotide to the strand of DNA being synthesized and this is read by fluorescence, as the next base gets attached, the previous one gets shunted out of the ZMW and is no longer observable.