What is the difference between sets and lists in Python?

There's a huge difference.

1. Sets can't contain duplicates
2. Sets are unordered
3. In order to find an element in a set, a hash lookup is used (which is why sets are unordered). This makes __contains__ (in operator) a lot more efficient for sets than lists.
4. Sets can only contain hashable items (see #3). If you try: set(([1],[2])) you'll get a TypeError.

In practical applications, lists are very nice to sort and have order while sets are nice to use when you don't want duplicates and don't care about order.

Also note that if you don't care about order, etc, you can use

new_set = myset.intersection(mylist)

to get the intersection between a set and a list.

sets — Unordered collections of unique elements

lists - ordered collections of elements

sets allows you to do operations such as intersection, union, difference, and symmetric difference, i.e operations of math's set theory. Sets doesn't allow indexing and are implemented on hash tables.

lists are really variable-length arrays, not Lisp-style linked lists. In lists the elements are accessed by indices.