Basically, units in Advance Wars 2 are divided into three groups: Ground units, Naval units and Air units.
Ground
Infantry
Infantry is the basic Ground unit, and is the cheapest, with a base cost of 1000. It is the weakest of all units offensively, and it's main strengths lie in its ability to capture buildings and to act as "meat shields".
Mech
Mech has better firepower against heavy units than infantry, but it is slower than it. It can be also used for capturing buildings.
Recon
Recon is strong against both infantry and mech units, but weak against other. It is mainly used because of great line-of-sight.
APC
APC can't be used for attacking, because it doesn't have any weapons. However, it can be used for carrying infantry and mech units and also for supplying other units with fuel and ammo.
Tank
Tank is weaker than Medium Tank and Neotank, but still serves for multiple purposes. It can move over relatively long distance and is useful against both infantry and light vehicles (Recon, APC, enemy Tanks).