Narrative and narration in films are the way in which the audience follows the plot. The difference between narrative and narration is only really clear when both are understood properly.
Narrative is basically the way we see all the events in a film unfold. E.g. 'Blair Witch Project'. A group of film students go into the woods to film a documentary about the myth of the Blair Witch. What we see is the people film everything that they do. We see (in a nutshell) them get lost, get scared and then looking at a wall.
Narration is the process through which a film conveys or withholds narrative information, the way the story is told. Narration concerns the actual arrangement and presentation of the story in the film, the way the film distributes story information in order to achieve specific effects. E.g. in the 'Blair Witch Project' the story conveys the idea that there is 'something' out there, but it withholds all the information on the thing by never showing anything out of the ordinary.
Once these two are understood we have to look into the two other effects to do with narration. These two are omniscient and restricted narration. Omniscient narration is where the audience is subjected to information from many sources such as 'Lock Stock and two Smoking Barrels'. The film switches from one character to the next all the time, thus we never get to know one character more that any other. Plus it gives the audience more information than any of the characters, so we have an advantage over them all, which creates a feeling of suspense because the viewer is on the edge of their seat wondering if a certain character will find out a specific piece of information. Restricted narrative is where the film conveys the narrative to the viewer via one character. E.g. 'Get Carter'. In this film we get almost all of the information from Jack Carter. He is in almost every scene. The advantage of this is that you know everything Jack knows, also