There are actually thee different groups of kangaroo types, with a total of about 50 species. There are the big kangaroos and wallabies, including the tree kangaroos, and the rat kangaroos (not the same as the kangaroo rats found in North America, which are actually a type of rat - a rodent!), and the musk rat kangaroos.
There is more difference between kangaroos and wallabies than their size. Kangaroos are much bigger - up to 2.4 metres (8 ft) tall, while wallabies are up to 600 mm (2 ft). Wallabies have different teeth, and have brighter colouring.
Kangaroos tend to live in open grasslands and eat grass and so their teeth are designed to cut grass. Their teeth are curved and have ridges and high crowns that can cut and slice the grass.
Wallabies live in bushland areas and eat mainly leaves. Their teeth are designed to grind up leaves, so it has flat teeth.
More info on kangaroo teeth here.