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I'm not too familiar with it, but using recalc--which I think is the default setting for historical sims--basically recalculates a player's ratings based on their real-life stats over a one-year, three-year, or five-year period. Using the development engine means OOTP starts with a player's real-life-based ratings when they enter the game, and then fiddles with them over the course of time based on parameters in the same way that it does for fictional players in fictional leagues.
So with recalc, you get more true-to-life results and perhaps more believability but also less surprises (and, I believe, Babe Ruth will always turn into a hitter). The dev engine can take many good RL players and turn them into busts, but I personally prefer simming that way.
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