Wet suits allow a bit of water to enter the suit. The suit is designed to minimize the amount of water transfer in the suit through the wrists, ankles and neck. The neoprene is the insulating mechanism. As the diver descends, the wet suit will lose some of its inherent buoyancy capability because of the compression of the material by the water. Wet suits, in comparison to dry suits, are relatively inexpensive - anywhere from $50 to $450 or so.
A dry suit incorporates attached boots of some sort. There are seals at the neck and wrists to prevent entry of water into the suit. A waterproof zipper allows the diver to don and doff the garment. Insulation is provided through the use of different types and layers of undergarments. The diver stays dry, with the exception of the moisture generated by the divers own perspiration (given that the neck and wrist seals aren't leaking!!!).
Some dry suits are made of thick neoprene which adds to the insulating capabilities of the dry suit. Others are made of laminated materials, while being very flexible, offer very little, if any, insulation.
Dry suits are also attached to a gas supply that adds internal gas into the suit to prevent "squeeze". The material of the suit collapses about the divers body as s/he descends. This squeeze can become problematic if not negated through the induction of gas, be it air from the divers tank or from an alternate supply, such as argon which some d/s divers use.
Dry suits have valves that allow for the addition and venting of the internal gas as its volume decreases or increases as the diver descends or ascends.
Dry suits are, in comparison to wet suits, pretty expensive. The price for a dry suit will start somewhere around $500 and get up to the $3500 range, if not more.
Most people, but don't quote me on this, will move from a wet suit to a dry suit when the water temperatures in which they dive drop below 50 degrees F or so.
the K