In Delphi (as in C++, etc.), a reference is really a veiled pointer. Hence, when you declare a variable of type
var TMyObject: MyObject;
space is not reserved for the entire object; rather, MyObject is a pointer to a TMyObject.

The compiler is smart enough to know the difference, but allows for the possibility that the programmer knows something it doesn't when you use the second syntax you illustrated. However, unless you really do know something funny about your variable, you should stick to the first syntax.

Hope this helps.