Spot Color Separations
This technique is most commonly used for vector designs, with flat areas of color and little to no color blending. Spot color separations are typically outputted from Illustrator, which helps to maintain the very clean lines from vector graphics. This technique is dependent on artwork having all elements assigned to specific Pantone Coated (or Uncoated) swatch colors. Doing so is an important step in assuring ink colors stay consistent with colors seen on the approved proofs.
Simulated Separations
This technique is most commonly used for designs that are photographic in nature, with lots of blendings or shading throughout. Simulated separations are produced in Photoshop and are derived from raster artwork. This technique is dependent on artwork being hi-res (300dpi or higher) and scaled at the final print size before being processed. The concept is for different ink colors to be gradually stacked on top of each other to simulate the appearance of a variety of colors (i.e. printing red and yellow to simulate orange). Halftones of different amounts are used to give the design a lifelike appearance.
Index Separations
This technique is most commonly used for layouts that include paintings or drawings as part of the design. Index separations are produced in Photoshop and are derived from raster artwork. This technique is capable of taking low-res native files and upscaling them, while maintaining the large majority of detail. This is unlike simulated separations, which use halftone dots to achieve blending. Index separations are created by a randomized dot pattern and imprint colors that don't stack on top of each other, but rather all butt up right next to each other. This style of printing does an incredible job of pulling off realistic imprints, while tricking the eye by using random dots.
Process Separations
This technique is most commonly used as a budget-minded alternative to a simulated separation. Process separations are produced in Photoshop and are derived from raster artwork. As with simulated separations, this technique is dependent on artwork being hi-res (300dpi or higher) and scaled at the final print size before being processed. The concept is for the literal process print colors (CMYK = cyan, magenta, yellow, black) to be gradually printed on top of each other to simulate a full spectrum of colors. Halftones are used, like in a simulated separation, but instead with each color's screen angle shifted in the same way traditional offset printing is done (i.e. newspapers). This method is best if done on white garments only.