The main difference between the Search-based Keyword Tool and the Keyword Tool currently in AdWords is that the former generates keyword ideas based on your website, and identifies those currently not being used in your AdWords account. Additionally, the Search-based Keyword Tool provides more detailed data for each keyword, such as category information, suggested bid that may place the ad in the top three spots of a search results page, and ad/search share. Both tools, however, offer the option of browsing all keywords across all categories.

You may also notice that some of the data (like such as the monthly search volume) may vary slightly between the two tools, which is due to different methods of calculation at this time.