There is no clear-cut and scientific distinction between BPO and KPO, as the term KPO was coined by some smart marketeers who want to set certain outsourcing services apart from the competition.
But there are indeed good reasons to make the distinction between BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing).
Both of course are related to outsourcing, both types of activity being performed in a setting where a provider offers service to a buyer (usually in a B2B environment), in such a way that the services are performed by the personnel of the provider, and not (or no longer) by employees of the buyer.
The distinction between KPO and BPO is related to the type of service, and consequently to the way in which the service is rendered.
BPO focuses on the rendering of services with a focus on process. Process orientation means that the activities of the outsourcing provider's personnel are guided by process descriptions, instructions and scripts that have every intention to reduce the subjective interference of the actor performing the service. The focus is to execute the activities in a predictable manner, with a focus on consistency and productivity.
Call centers are obvious examples of BPO, other examples are financial transactional services (booking of accounts payable).