There is no big difference between Mysql and Mysqli.
Mysqli is nothing but an improved extension of Mysql which supports OOPS.
In some blogs and benchmark says that Mysql is slightly faster than the Mysqli Extension.
There are major difference between the Mysql and Mysqli extensions.
Unless you're using MySQL < 4.1 or PHP 4 you should be using the mysqli extension, even if you're using the procedural version of it. There is NO reason to be using the mysql extension, it is not receiving active development (only maintenance) releases and it can not utilize any of the new MySQL features since 4.1 (5.0, 5.1, and 5.5 have all been stable releases since), such as character sets, prepared statements, multiple statements, transactions, enhanced debugging, embedded server support etc.
Mysqli is also the suggested extension to be used for all new development.