In creative writing workshops, the terminology we use to describe a narrator's voice seems to be determined primarily by the pronoun that the narrator uses. Third-person narrators can then further be described as "limited" to the point of view of one central character. We also talk about the shifting point of view, and whether this is a good or а bad thing.
In terms of Narrative theory, Suzanne Keen puts it this way: "A personified, overt narrator who exists inside the story world with the characters about whom he or she narrates is perhaps the most logical bearer of the term 'limited,' since the circumstances of the narration would usually imply that such a narrator could not exercise omniscience, having good excuses for not knowing everything, or even for withholding information. (41)" Personified, overt narrator who exists inside the story world? Keen's example is Iris Murdoch's Philosopher's Pupil, which I haven't read. I'm thinking about Pushkin's Belkin stories -- but I must come up with better examples. Reading for narrative mode is a special kind of reading.
Also, I find it interesting that Keen, while noting the, well, limitations, of the colloquial ways of describing narrators, only in passing mentions the more technical terms introduced by Gerard Genet. Keen's book is meant for both, literature and creative writing students, but still, she shies away from using more specific vocabulary. (Professor Peel reminded us that every narrative theorist comes with her own vocabulary. As long as you define your own set of terms in your own words or with an appropriate reference, you'll still get an A). Personally, I like Genet's terms: heterodiegetic narrator exists outside the story world, and homodiegetic narrator writes from the insider's point of view, takes part in the story world, exists within it.
Was it Genet or a later theorist who suggested that these terms are not an opposing binary but rather a continuum of all the possible modes? I like this notion of continuum.
And a limited third person narrator? I think we frequently apply this term to both, heterodiegetic and homodiegetic narrators, and confuse ourselves about what our narrators can or cannot do as a result. I have seen this fluidity in terminology result in hurt feelings in workshop situations.