Recovery scenario manager is used to handle the run time 
error and it is able to handle the pop-up window, Object 
state, Application crash and test run error.
Where as, On Error Resume Next will handle the particular 
code snippet where exactly the error occurs. And it skips 
the line and it will take to other code and it is used only 
when there is thousand lines of code available and i don't 
want to stop my test run for a minor error. 

Thanks in advance if i m wrong correct me.

Recovery scenario manager has handling three kind of errors 
i) POP-UP, ii) RUNTIME and  iii) OBJECT  STATE.
whenever you run the script it may detect some exceptions 
like pop up , runtime and object state you can you Recovery 
scenarion manager and resolve those three kind of 
exceptions.

I do not have idea about Error Resume, am new to 
QTP.