The basic difference is the amount of storage on each disk. CDs have 700MB. DVD single layer have 4.7GB. So DVDs can hold over 6 times the data. You can use both for pretty much the same things. DVD is the disk of choice for movies so the home players are primarily DVD players.
On the technical side the increase in the capacity (density) is accomplished primarily by using a difference type of laser to burn the pits in the disk shiny surface. The wave length of the DVD laser is substancially shorter. For more in depth coverage see the link below.
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