According to Associated Content, there are three forms of internal conflict: approach-approach, avoidance-avoidance, and approach-avoidance. Approach-approach exists between two positive outcomes; avoidance-avoidance exists between two undesirable outcomes; and approach-avoidance exists when choices have both positive and negative outcomes.
External conflict manifests when an individual takes an action against an opposing entity. In storytelling, the character taking the action is the "protagonist" and the opposing entity, the "antagonist." An antagonist can be a person, an object, a set of circumstances or a force of nature.
Though often discussed in terms of fiction, internal and external conflict are present in every day life. For example, buying a car might cause internal conflict in the form of a personal dilemma about which car to purchase and then an external conflict in the form of haggling with a sales person over the price.
Conflict serves narrative in two ways. It motivates characters to take action and provides obstacles that force characters to transform.
Generally, conflict results in some form of stress and the individual's desire to relieve it. In traditional narrative, this drives the plot forward and increases in intensity until the story's climax.