Potential energy is "the energy of position", also known as stored energy. It is the energy we keep "in reserve" for when we need it.
Kinetic energy is motion energy, and energy is defined as "the ability to do work and/or produce heat".
Basically, all energy is either potential or kinetic. Stored energy can be used for motion, sound, heat, light, etc. After it is "used", it is stored again for future use. On a biological level (living stuff), we eat food that is turned into potential energy in out bodies until we need it. Some of the food is also turned into kinetic energy for regular life functions (breathing, body heat, heart beats, etc).
On a chemical level, atoms and bonds between atoms store energy. When a chemical reaction occurs, the energy is released and either used or stored back in the bonds for future use. Examples of chemical reactions are combustion (car engines, wood burning, and it is part of the animal life cycle), oxidizing (why the Statue of Liberty is green and silver turns black over time), decomposing (food going bad), and exploding (nuclear reactions actually turn mass into energy: its the famous Einstein equation E = mc2).