There are several differences and distinctions between the two different talmuds or “gemaras”. Where they were written, the language, the Rabanim that are quoted... Etc. I will attempt to explain the differences and distinctions between the two, as well as some of the practical ramifications as well.
1. A brief history of the Talmud.
Originally, Jewish learning was meant to stay oral forever. Rabbis expounded and debated the Torah and the Tanach without any written works other than the Tanach itself, though some may have made private notes, what’s refered to as megillot setarim, for example of court decisions. This situation changed mainly as the result of the destruction of the Jewish state and the Second Temple in the year 70 CE and the consequent upheaval of Jewish social and legal norms. As the Rabbis were required to face a new reality, mainly Judaism without a Temple and Judea without at least partial autonomy, there was a flurry of legal discourse and the old system of oral scholarship could not be maintained.
The Oral Torah varied among various schools. The most famous two were the School of Shammai and the School of Hillel. In general, all valid opinions, even the non-normative ones, were recorded in the Talmud.
The Gemara is a part of the Talmud made up of rabbinical analysis of and commentary on the Mishnah. After the Mishnah was published by Judah HaNasi (c. 200 CE), the work was studied exhaustively by generation after generation of rabbis in Babylonia and the Land of Israel. Their discussions were written down in books that became the Gemara, which when combined with the Mishnah constituted the Talmud.
There are two versions of the Gemara. The Yerushalmi, also known as the Palestinian, was compiled by scholars of Israel, primarily of the academies of Tiberias and Caesarea, which was published between about 350–400 CE. The Bavli was published about 500 CE by scholars of Babylonia, primarily