Weight-loss surgery falls into two basic categories: restrictive surgery and malabsorptive surgery.
Operations that reduce the stomach size are known as restrictive surgery because they restrict the amount of food the stomach can hold. An example of this type of procedure is the adjustable banding or the Lap Band.
Some operations combine stomach restriction with a partial bypass of the small intestine. These procedures create a direct connection from the stomach to the lower segment of the small intestine, literally bypassing portions of the digestive tract that absorb calories and nutrients. These are known as malabsorptive surgery.
A combination of restrictive and malabsorptive procedures tend to produce more weight loss than either procedure does on its own. An example of a combination is called Roux-en-Y Gastric Bypass Surgery. Today, this procedure is considered the "Gold Standard" for bariatric surgery.
I hope this helps clear up some things!