What's the difference between a hovercraft and a boat?

Firstly, a hovercraft isn't in the water - its on the water. On full cushion it barely brushes the surface it travels over. The major differences between a hovercraft and a boat are:

• Hovercraft can travel over almost any type of solid, semi-solid or liquid surface (land, water, mud, etc).
• Hovercraft don't need moorings or anchorages or any special shore facilities (piers, ramps, etc) - they just need a sloping bank to land on (and they don;t cause damage to the bank either).
• When operating over water, a hovercrat pilot doesn't have to worry about hitting underwater objects (rocks, sandbanks, etc) - if there is nothing visible above the surface then there it is no problem for a hovercraft!
• Hovercraft are much more fuel efficient than a boat - they typically consume 1/2 to 1/4 of the fuel of a comparable sized boat at the same speed.
• Hovercraft don't pollute the water with exhaust gases as the engine exhuast is directed to atmosphere and dispersed quickly.  Boats (in particular 2-stroke outboards, pump burnt and unburnt hydrocarbons directly into the water.
• Hovercraft can be operated in environmentally sensitive areas such as inter-tidall nature reserves, mud estuaries and in areas with delicate vegetation or wildlife without causing any  significant damage to the surface.

A hovercraft (or "air cushion vehicle") is a machine that "hovers" on a cushion of air above the surface it is traveling over.