Live food main draw is that it allows the fishkeeper to see the fish's natural behavior. Different fish have different styles of feeding, some uses ambush, others use chase, some go for the kill while others swallow whole. Whichever the method used, it is a nice experience to see your fish eat and one of the pleasures of fishkeeping.
Main differences between live food, fresh food and packaged food
Live food - ie feeder fish, frogs, worms etc
Fresh food - ie market prawns, poultry, beefheart etc
Packaged food - pellets, freeze dried shrimps and worms etc