What is the fundamental difference between world and kernel?

Please correct me if i am wrong!

Kernel is the thing who is always present in memory, who is always working and who does all "hardware" stuff. Nothing works without the kernel, but you cannot do anything with only the kernel.
World (also called userland) are the most basic programs like shells, commandline editors, filesystem tools and so on. Instead of applications, they are installed by default.
 
Buildworld builds the so called "userland" part of the OS which is all binaries, shared libraries, shell scripts, skeleton configuration files and some documentation that are all installed on the root file system excluding /usr/local that is reserved for 3rd party software from ports and packages. Buildkernel builds the kernel obviously as the name suggests. The kernel consists of everything under /boot/kernel, the kernel file itself is /boot/kernel/kernel and then there are the loadable kernel modules that are all files named /boot/kernel/*.ko. The kernel is what provides access to the hardware in an abstracted and controlled way so that programs don't have to deal with the hardware directly, see http://en.wikipedia.org/wiki/Kernel_(operating_system).
 
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