What is the difference between Taxonomies and Custom Fields when using the CustomPress Plugin?

I read the Usage section for this plugin and I created a custom post that used both taxonomies and custom fields. Although the process is a little different between the two, I don't understand the difference between the two.

So I don't have an explicit problem. I am just concerned that there is a subtle difference that makes a big difference that is only noticeable once you have an entire community using the network.

Thanks in advance for your help!