Here is a post from a few years ago on this subject:

RE: B vent; D vent; ventless and which models??? (Follow-Up #1)
posted by: renron on 12.19.2006 at 07:28 pm in Fireplaces Forum

First, DON'T install a ventless fireplace!!!
Even though the MFG.s will tell you the exhaust fumes are OK, do you really want to breathe them? Many people end up with Major Headaches and chronic breathing issues. Does it sound like a good idea to breathe burnt exhaust gasses?
B type flue(vent) pipes are dual thickness pipes. A pipe inside another pipe, suitable for use at 1" or more to flammable materials. Outer casing pipe is sealed and will not conduct air.
D (Direct Vent) type flue(vent) pipes are also dual layers but they are capable of exhausting burnt gas through the inner pipe and importing exterior(outside) combustion air for burning. Think of a straw inside a larger straw. Inside straw blowing, outside straw sucking outside air for combustion. A fan is usually used to help exhaust the burnt gasses.

Details below:
B-Vent (Natural Vent) gas fireplaces are designed primarily for decorative use. Generally they produce a larger and more realistic yellow flame. B-vent fireplaces are sometimes available without a glass window, so many homeowners are attracted to this design because of the open, realistic flame effect; some models do have a glass window so the existence of a window on a fireplace does not define its product classification. Natural vent gas fireplaces use room air for combustion and vent fumes through a vent or chimney that must terminate vertically above the roof line. The key to determining whether a B-vent fireplace will meet your heating needs is to check the manufacturer's listed efficiency rating (gas consumed x efficiency = heat output). While efficient, heater-rated B-vent fireplaces do exist, many lower quality "builder grade" fireplaces have no efficiency rating and, therefore, will not supply substantial heat. In fact, this category of fireplace will often use the greatest amount of gas at the lowest range of efficiencies. If you live in a warmer climate where you want the aesthetics of a fire without much heat, this may be the appliance for you. Likewise, bedrooms and smaller rooms may be a good candidate for a b-vent fireplace, but please check building codes to see if this class of fireplace is approved in your locality or for installation in the room where you'd like to use it. Local/national codes in some areas prohibit the use of b-vent rated appliances, especially in colder climates. Be aware that very "air tight" houses can cause performance problems with b-vent rated appliances, so please consult an experienced fireplace installer who can advise you on the proper installation and use you are considering.

Direct Vent Fireplaces offer the most features with respect to gas consumption, efficiency ratings and venting options. A direct vent fireplace will always have a glass window because these fireplaces are sealed systems using a double walled venting system. Combustion air enters the appliance via one section of pipe while fumes and moisture are vented through the other pipe. Most often, a double wall "pipe within a pipe" system is used. Subject to each model's requirements for distance and offsets, direct vent fireplace venting may be terminated either horizontally or vertically. Efficiency rating will average 65% to 84%, similar to ratings on gas furnaces. Keep in mind that these appliances must "waste" some of the heat produced to create a draft of rising warm air to evacuate the fumes produced without aid of a forced air exhaust system. Think of direct vent fireplaces as a decorative furnace: the beauty of a realistic flame with high efficiency. This appliance is great for primary or supplental heating and for emergency backup heating as most work without aid of electricity. Because this is a sealed system that uses outside air for combustion, direct vent fireplaces are usually the favored choice among those in the fireplace industry because of their greater efficiency and exceptionally reliable performance.
Hope this info helps,
I am a General Contractor.
Renron

I agree with Renron above. Direct vent is definitely the way to go. Since it is a sealed firebox that vents to the outside, the gas fumes do not pollute the indoor air, and the other vent draws air from the outside to feed the combustion, so you do not deplete the indoor air of oxygen. If ever you plan to use you basement room as a sleeping room, it would probably be illegal to have a ventfree system. Check with your local building code. I would try to get my money back on the ventfree unit. If that's not an option, maybe you can use it on your patio or somewhere else outside.