Javeed: I disagree. I have both mice, and having the buttons accessible by your thumb on the left side is far easier than trying to use your middle finger or ring finger to press the botton on the far right side of the Optical version. Try it... I think you'll agree.
As to "what's the difference": There really is no internal hardware difference. Each of my mice came with different versions of the driver, but I notice that I can flip between the drivers (for instance, on my IntelliExplorer computer I can select "IntelliMouse Optical"

and not have any difference int he way the mouse behaves.
The Explorer definitely does NOT feel smaller and cheaper than the Optical, as someone suggested. The Explorer is definitely larger, and slightly heavier, though I think they both weigh about exactly the same.
So, what are you paying the extra for? Largely, styling. My guess is Microsoft will phase out the Optical in favor of the Explorer, if they haven't started doing so already.
(Also, for purely silly reasons, the explorer looks much, much cooler in its metallic grey...)