There is a post somewhere around here that answers your question well but I can't find it. There is this one though http://www.litestep.net/index.php?section=4&action=view&catId=2&id=647.

Windows Blinds is a skinning program, not a shell. It's capable of skinning applications and the explorer shell (the bar that contains the start menu, quicklaunch, taskbar and system tray). But that's all it does. When you download a theme for WB it does not add any signigicant functionality to the explorer shell (or your applications). It just gives it a paint job.

Litestep is a shell. Not a skinning program. It replaces your explorer shell. It does not affect the way applications look. Litestep themes are more than skins for the shell. They complete changes the functionality of the shell, often improving features and adding unique functionality and designs. Litestep is extremely flexiable and as a result make it not so user friendly.

If you just want your windows to look different then get Windows Blinds. If you find the explorer shell restrictive and poorly design then dowload Litestep and enjoy the freedom of designing a theme for the Litestep shell that does exactly what you want. Then share it with the community.