Actually, the difference has to do with the way the services/daemons are started and not with the application/service itself, because the 'service' command is a script that points to the /etc/init.d/ directory that contains a number of start/stop scripts for various services.
i.e. The commands below do the same function:
service iptables start
I find the service command easier to use as it's shorter , but it's not available in all the distros. Anyway you can just create it in the /sbin directory.
You might want to check the following howto, that mentions about it:
Once you understand this process you can also search about the 'SysV-style' and 'BSD-style' init..
Have fun and good luck!