I've done a lot of SQLXML programming with simple queries in XML files and XSLT files to transform those query results to HTML pages. I used CONVERT a lot to convert money and datetime values to varchar in the format I needed before it even gets to the XSLT, saving a lot of messy XSL formatting on the front end.
I'm quite surprised that, at the time I answered the question, approximately 3/4 of people got this question wrong. Just under 1/3 of respondents thought there was no real difference! This question, to me, is T-SQL 101. Even if you don't know that CONVERT() is T-SQL-specific, you should know the differences in inputs and potential outputs.
This is not criticism of those who got the question wrong: we all have holes in our knowledge. But it does highlight the value of this QoTD. Before this question, I would have assumed this to be a universally-known topic in MSSQL circles. Now I know I can't make that assumption. And now those who didn't know of the difference have learned something.