The key difference between .xmp and .lrtemplate files lies in their format and compatibility with different versions of Adobe Lightroom.
.lrtemplate files: These are the older preset format, primarily used with Lightroom 4, 5, and 6. You'll typically find .lrtemplate files in the "Develop Presets" folder within the Lightroom app.
.xmp files: Introduced in Lightroom CC (2018) and Lightroom Classic CC 7.3 and later versions, this newer format offers enhanced compatibility and synchronization across multiple Adobe Creative Cloud applications, including Photoshop's Camera Raw. These files are stored in the "Settings" folder under the "Camera Raw" directory.
When using Preset Studios Lightroom Presets, it's important to choose the correct file format based on the Lightroom version you have. If you use Lightroom 4, 5, or 6, go with the .lrtemplate format. For Lightroom CC (2018) or Lightroom Classic CC 7.3 and newer, opt for the .xmp format.