There are four categories of restriction modification systems: type I, type II, type III and type IV, all with restriction enzyme activity and a methylase activity (except for type IV that has no methylase activity). They were named in the order of discovery, although the type II system is the most common.
Type I systems are the most complex, consisting of three polypeptides: R (restriction), M (modification), and S (specificity).  The resulting complex can both cleave and methylate DNA. Both reactions require ATP, and cleavage often occurs a considerable distance from the recognition site. The S subunit determines the specificity of both restriction and methylation.  Cleavage occurs at variable distances from the recognition sequence, so discrete bands are not easily visualized by gel electrophoresis.
Type II systems are the simplest and the most prevalent. Instead of working as a complex, the methyltransferase and endonuclease are encoded as two separate proteins and act independently (there is no specificity protein). Both proteins recognize the same recognition site, and therefore compete for activity. The methyltransferase acts as a monomer, methylating the duplex one strand at a time.  The endonuclease acts as a homodimer, which facilitates the cleavage of both strands.  Cleavage occurs at a defined position close to or within the recognition sequence, thus producing discrete fragments during gel electrophoresis.  For this reason, Type II systems are used in labs for DNA analysis and gene cloning.
Type III systems have R (res) and M (mod) proteins that form a complex of modification and cleavage. The M protein, however, can methylate on its own. Methylation also only occurs on one strand of the DNA unlike most other known mechanisms. The heterodimer formed by the R and M proteins competes with itself by modifying and restricting the same reaction.  This results in incomplete digestion.
Type IV systems are not true RM systems because they only contain a restriction enzyme and not a methylase. Unlike the other types, type IV restriction enzymes recognize and cut only modified DNA.