Both are level-based, although at least initially, Diablo levels faster.
Diablo is more of a hack-n-slash game focusing on action. The plot is not that important, and in Diablo (Diablo II to a greater extent) the levels are random, to help with replayability. There are also random items in Diablo series.
Baldur's Gate series is more story driven than Diablo, with less of a focus on action. The gameplay is not randomized, and the plot and characterization play a much bigger role in the game than in Diablo.
So basically if you want a hack-n-slash clickfest with tons of items, go Diablo. If you want a game with story and characterization, but very little replayability, try Baldur's Gate.
Frankly the first Diablo is so cheap and so is the first Baldur's Gate (which is very similar to BGII), so just get both.