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One is settings for the User. The other is for the System as a whole. I know this is not all that much more clear! The settings in the Control Panel are tied back to the configuration files. Here is some more detail.
The deployment.properties file is used for storing and retrieving deployment configuration properties in the Java Control Panel. They are also used for customizing runtime behavior for both Java Plug-in and Java Web Start.
There is always a User-Level deployment.properties file. Its location, which is non-configurable, is described below. There may also be an (optional) System-Level deployment.properties file. If it exists, its location is determined by a System Administrator through the deployment.config file as described below.
Hope this helps,