The best and most succinct explanation of the difference that I've ever heard is this:
"Sci Fi is what could be but isn't.
Fantasy is what can't be but is."
Fantasy is what can't be but is."
I believe it was Orson Scott Card who said this but I can't prove it. If anyone knows if it was indeed Mr. Card, or if you know who did say it, please let me know. If I happen to be lucky enough to have made it up without realizing it then I claim it as mine, but I doubt I did.
The difference is Sci Fi uses science to explain its impossibilities and Fantasy uses magic. The two genres have more in common then not. And yet I've heard of infighting amongst the geeks and nerd ranks. Contention rages about the validity of Sci Fi over Fantasy or vice versa. Arguments that one is better than the other abound.
Brothers and sisters (assuming there are any girl geeks out there, I've yet to find any) please put this bad blood which runs between our two great genres aside. They are both capable of greatness and culpable of ... ungreatness. But there are those who would deride us all of our place in the world. Those who view both genres as dross. The enemy is out there, let us not do their work for them. Besides if Sci Fi and Fantasy really were to clash one with the other I think we all know who would win.
Huh... I didn't expect that. Although it may look bad now, this knight is totally gonna kick this space ranger's butt. Trust me, because in Fantasy we got the magic.