Powdered iron cores are sometimes called "distributed gap" cores. Instead of a single gap, as used with ferrite cores, you can think of a powdered iron core has having thousands (millions? billions?) of little gaps between each iron powder particle in the core. Inductors wound on powdered iron cores will have a much "softer" saturation curve. That is, there isn't a single point at which the inductance drops off sharply. It's gradual.
There are also many types of powdered cores. The cheapest is simply "powdered iron", but there are other types like MPP, Hi-flux, and Sendust. All have their tradeoffs, of course.