We went to the NFPA (National Fire Protection Association) Standard Methods of Fire Tests for Flame Popagation of Textiles and Films handbook to briefly explain the differences. To quote from their website (http://www.nfpa.org/)
Test Method 1 shall not apply to specimens having an areal density greater than 700 g/m2 (21 oz/yd2).
Test Method 2 (flat specimen configuration) shall be used for fabrics, including multilayered fabrics, films, and plastic blinds, with or without reinforcement or backing, with areal densities greater than 700 g/m2 (21 oz/yd2).
NFPA is an international nonprofit organization that was established in 1896. It's mission is to reduce the worldwide burden of fire and other harzards by providing in part codes and standards for fire prevention.