Hey John,
Spend 50 hours researching, and I'll bet you won't discover exactly the difference.
Look in your Keychain with the Keychain Access.app, and see the Internet Password category.
Read the security man page and look at the various commands:
add-generic-password Add a generic password item.
add-internet-password Add an internet password item.
delete-generic-password Delete a generic password item.
delete-internet-password Delete an internet password item.
find-generic-password Find a generic password item.
find-internet-password Find an internet password item.
Play with the security command-line tool and dump various records Internet and Generic to compare...
Internet Password records will have some fields that Generic Passwords don't (and perhaps vice-versa).
-Chris