E.B.
These are the main differences (I'm a loyal Turbo Tax user!):
Downloading the online version means you don't pay a thing until you actually file your taxes. If you get halfway through and find out you hate it, or decide to bring your paperwork to a tax preparer, you haven't wasted any money. Purchasing the disc at a store of course means that even if you don't file through Turbo Tax, you've still spent that money.
The online version uses less memory and space on your computer's hard drive.
Using the online version means you can sit down at any computer and access your taxes. My dh is away for his job and he can open his laptop across the country and input his job-related expenses, and I can be at home and input all the medical expenses, for example. If you buy it in a store, you can only use it at the computer you install it on.
The online version digitally stores your tax returns and you can access older years if you need to. The disc version requires you to store your tax returns on a CD or hard drive, or you can print them.