As has been mentioned, some people try to maintain a distinction between “graphic novels,” to mean a work published in a single issue which tells a complete story, and “trade paperbacks,” which collect multiple issues that have been published previously (and which usually tell a complete story). But I find that’s a distinction that is lost on most readers. I routinely hear people referring to things that are clearly trade paperbacks by that definition, such as Watchmen or The Dark Knight Returns, as graphic novels. Even Art Spiegelman’s Maus, which everybody calls a “graphic novel,” and which everybody points to as an example of how sequential art can deal with serious subjects, was originally published serially.
So there’s no point in insisting on a distinction between graphic novels and trade paperbacks, because nobody maintains that distinction.
Things that tend to be called graphic novels do often have a difference in format–they tend to be printed on higher quality paper, and the covers are usually stiffer paper and the spine is usually square-bound with glue rather than staple-bound. Graphic novels also tend to be longer than traditional comic books, although not necessarily by much. The Killing Joke, for example, is 48 pages. That’s a bit longer than a typical comic book issue, but not by a huge amount.
Ultimately I voted “No difference.” I tend to agree with typoink that it strikes me as a term intended to distance the work from those silly embarrassing “comic books” that the kids read, but that serious people should disdain. If you’re going to use a term for the format of stories told through sequential art, then the term should be generic enough to refer to all examples of the format, regardless of quality. After all, we don’t reserve the word “novel” for serious literary works examining the human condition, and use some other word for forgettable potboilers that you buy in the airport and toss in the trash as soon as you get off the plane. Good or bad, they’re all novels. “Comic books” should be the same way.