rating inequalities between game types.

I noticed that some types of games seem to have inflated ratings vs other types. For example daily game type has Inflated ratings vs blitz game type. I have seen some discussions where people are accused of cheating on daily games because thier live play rating is much lower. However, if you look at the percentile it is plain to see that at least at mid range blitz ratings are depressed vs daily games. At 1100ish I feel the players in blitz are decently strong ei: they often parry traps in openings and some complex tactics. However in daily games 1100 seems beginner level with quality of games at this level even below blitz games played at 1100, while one would expect higher quality games with the time allowed in daily games. I was just wondering if anyone knew the reasons for these ratings divergence between types.

There seem to be 3 types of correspondence ("daily" in Erikspeak).  There are folks who take full advantage of all the legal tools available (books, videos, and databases), there are those who take their time but don't use any reference material, and then there are those who would rather be playing blitz but have crappy connections.  The blitz guys usually have dozens or even hundreds of games going.  These are 3 seriously different pools of players, but they all are lumped together.  Well, that's my take on it anyway.

Don't mean to sideline the original question, but which of the first two ways of playing correspondence chess is benefiting the player more in regard to their chess? The referenced or unreferenced?

Depends who you ask.  There are serious differences of opinion on this.  I do know that NM aww-rats credits his correspondence play (and always taking at least 2 to 3 hours on each move) for his OTB performance rise to titled player.  I've read others say that as much as possible they are trying to replicate an OTB game and so refuse to use anything but their brain.  I don't think you should become a slave of the databases, but it sure does refresh your understanding of openings to review them over and over again. As always, your mileage may vary...

It kind of depends. I use opening books/databases in an effort to learn openings and hopefully have very playable middle games. It is also an attempt to learn different ideas in the openings and find things I may or may not like about certain lines.

The hope is that I can use that and later study of those games (along with assisted analysis) to improve my OTB and live capabilities.

And I agree with baddogno, that the style of play can have a pretty big impact on how ratings are reflected within a pool. I usually use most of my time (though not all of it isn't spent on the move -- I'll analyse and come back to it a few times to see if I still like the same ideas) and can usually come up with better plans and am less likely to blunder (unfortunately it still happens) . In something like live with rapid and blitz time controls, I blunder a lot more and that gets reflected in my rating.

my point is though the average rating is much different and I was just wondering if anyone knew what contributed to this inflation not the differences between individual players ratings for the two types

I think I figured a good part of this out. chess.com allows players to estimate their own strength when starting an account. this changes their starting rating. so there are two possible explanations to how this could affect the inflation of daily game ratings vs live game. one possibility is that players who are new to chess.com do not fully utilize the legal tools for daily games, there by distributing a good chunk of their rating across the group at large.