The difference between augmented reality (AR) and virtual reality (VR) lies in their immersive experiences. AR overlays digital information and graphics onto the real world, enhancing the user's perception of their environment, as seen in applications like Pokémon GO. In contrast, VR creates a completely immersive environment, isolating the user from the real world and allowing them to interact with a computer-generated experience. Both technologies have unique applications but serve different purposes in interaction design.