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while I can't tell you exclusively the differences, other than more methods have been added and some have been deprecated, from version to version, that is at least one difference.
I know several like me are reluctant at the moment to jump on up to 1.5, for fear of (and reasonably so) making their current apps go haywire!
Mine did just the other day when I tried to upgrade the JDK from 1.4.0 to 126.96.36.199!! It hosed everything.
J2SE is the Standard Environment, and J2EE is the Enterprise environment, which at the very least allows for things like the java Mail interface, using servlets and classes with the HTTP environment!
I'm sure many other posters could more accurately and specifically give you some other criterion of differences and advantages.