Due to an inherent difference in intended function, the stylus differs greatly from the digital pen. Both are utilized to input information into a display device, but their role in doing so varies.
A stylus is primarily used to input and manipulate information on a PDA device. Small and thin, these faux-pens allow users to tap through menus, write notes, and draw on their device. Because PDA screens are so small, you must often use shorthand script and only very limited diagramming when it comes to note-taking.
Used in conjunction with a computer, digital pens allow for a much broader range of function than a stylus. Graphic designers often use digital pens to create art on tablet PCs while avid students take full-blown notes in class. These devices translate motion back to the computer, where it is rendered into graphics, writing, or text.
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A stylus is generally smaller and much thinner than a digital pen because it contains no internal electronics. Many digital pens do more than just write or draw; they often have built-in capabilities to record audio as well. While a stylus requires only pressure on the screen of a PDA for its input to be recorded, digital pens require some form of connection to a computer to operate, whether a form of wire, Bluetooth connection, etc. Many digital pens also require the use of special types of paper whereas a stylus needs only the screen of its parent device.