What is the primary distinction between the Difference and Clip geoprocessing tools in QGIS?
The following quoted text came from a deleted blog post at infogeoblog.wordpress.com which was called Geo-Processing in QGIS.
Given two input shapes:
Clip creates a new shape based on the area of the input layer that is overlapped by the clipping layer. It is similar to the intersection but differs in that the attributes of the chosen layer only are copied to the new feature. It is similar to MapInfo’s Erase Outside function.
Difference creates a new feature based on the area of the input layer that isn’t overlapped by the clipping layer. It is similar to MapInfo’s Erase function.
Basically, Clip keeps the area of the "clipee" that overlaps the "clipper", while Difference keeps the area of the "clipee" that does not overlap the "clipper". I use the same terms for clarity even though we aren't clipping per se with the Difference tool.
Side note, Difference in QGIS is equivalent to Erase in ArcGIS as well.