The main difference is that a Layer 3 switch only routes the first packet in a flow. Once the route is determined, the packet forwarding is off-loaded to the switching engine. This leaves the router to perform other tasks and dramitically inreases the perfomance since most of the packets are effectively switched. As lrmoore pointed out, Layer 3 switches tend to leave out some of the more robust routing features that would be more suited to a dedicated routing device, although you can get those features on some L3 switches if you have the $$$$.
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by: lrmoorePosted on 2003-06-16 at 05:37:13ID: 8731410
L3 switches are fast routers. In Cisco's case, the same IOS runs both on routers and on switches. One of the primary differences is that only a more traditional router can "route" traffic between disparate physical-layer connectivity, i.e. between Token Ring and Ethernet, between WAN (T3, T1, ISDN, etc) and LAN.
Because the L3 switches need to be fast, many of the advanced features of a router are left out, ie. IPX and Appletalk routing, advanced routing protocols like OSPF, IS-IS, and sometimes Quality of Service as well as access-control features.