Hi James! Russ is right; with Studio, you take advantage of the PowerPoint environment to build your content slides, and you can also use the form-based authoring in Quizmaker and Engage to add assessments & interactions to your course.
With Storyline, you have a single standalone tool (completely separate from PowerPoint) that allows you to build everything in one place (content slides, quizzes, interactions, even screen recordings & simulations)... and your imagination's the limit - you can create all sorts of rich interactivity by using features like slide layers, states, triggers, variables, etc.
Here's a summary of the differences. For a sneak peek at what's coming in Studio '12, you can check out this page. And speaking of Studio '12, we plan to beta test that this summer. You're welcome to apply to be a beta tester if you like, by sending an email to firstname.lastname@example.org.