I think the difference is your goal... if you just want more engagement or more eyes on that particular thing you've posted - BOOST. But if you want to get a particular offer/product/service out to a particular group (considered advanced customization) - then you'd create an ad

Hi Amrinder,

A very interesting question indeed.

Boosting a Post or a ‘Boost Post’ sends the post from your wall to the other person’s wall considering the fact that they are interesting in it. On the other hand, Creating an ad or ‘Create Ad’ is more or less similar except the fact that you can send the posts to other people’s newsfeed, thereby encouraging them to visit your website, interact and like your page.  

To create an FB ad: https://en-gb.facebook.com/business/help/132037906870538

To boost your FB post: https://en-gb.facebook.com/business/help/547448218658012

So which one is right for you?

Before you start with any of these, you must have a clear objective. You must be clear with the two basic questions -  “Where do you want your ads to show and what do you want to achieve”

Consider the quick reference guide for the detailed list of features on both the options:

Illustration courtesy: http://www.reloadmedia.com.au/searchstrategy/social-media/the-difference-between-facebook-ads-boosted-posts/

Hope you are satisfied with answer. Feel free to discuss.

Thanks

Ankur