One is dry, while the other is not quite as dry and is usually found in liquid form.
Dry yeasts are granular packets and the few strains available are suited for many beers. Many homebrewers are finding the less costly dry packets are a great yeast for most of their brews. Liquid yeasts come in a lot wider variety and are usually more specifically designed for a particular beer.
I use dry in most my beers (pale ales, american wheats, IPA's, pilsner styles). I use specific liquid strains for beers that really derive their flavor from the yeast (Belgian Wit, New Castle, Irish Ale for my Stout, Weiss...)