First, ethanol can be used in gasoline engines while biodiesel and svo can be used in diesel engines. Second, ethanol and biodiesel are refined products that have undergone a chemical reaction before becoming a fuel while svo is more crude. Third, any of the three can be combined with petroleum fuels (to form E85 or B10 for instance) or used neat (100% ethanol, biodiesel or svo).
Ethanol is an alcohol made by converting starches to sugars and then fermenting the sugars. It's a bit like brewing beer.According to the EPA, bioethanol is ethanol made from 'celluosic biomass' (forestry waste, leftover materials from food crops like stalks and leaves, household waste, etc) instead of feedstocks like corn. Ethanol production involves several steps to convert complex sugars into simple sugars, ferment the sugars, recover the ethanol and reclaim the byproducts. Lignin is a significant byproduct of ethanol production which can be burnt to produce electricity.
The basic chemical process looks something like this:
C6H12O6 -->2 CH3CH2OH + 2 CO2
glucose-->ethanol + carbon dioxide
Biodiesel is an alkyl ester produced from oil from various feedstocks like vegetable oils, animal fats or other recycled greases. This process of transesterification requires heat and a catalyst to react the triglycerides in the oil with an alcohol forming alkyl esters and glycerin.
Triglycerides + Free Fatty Acids (<4%)--> Alkyl esters + glycerin
Biodiesel from vegetable oil, for instance, can be produced in a blender. The process is relatively simple: mix the catalyst with methanol, add the oil, mix and the resulting biodiesel and glycerin will separate into 2 layers. Excess methanol can be recovered to be used again and the glycerin can be composted or used in pharmaceutical and cosmetic products.
Straight vegetable oil is just that: the same oil you would use to fry a wonton. It can be reacted into biodiesel or it can be used as fuel immediately. Many svo drivers and small biodiesel producers use waste vegetable from restaurants as their 'feedstock.' Virgin (unused) oil can also be used. Svo does indeed combust in a diesel engine but needs to be preheated.