Orchestration or Workflow?  This question often comes up when talking about the new Windows Workflow Foundation.  Windows Workflow Foundation (WF or, Workflow) is Microsoft’s technology platform for building workflow-enabled applications. The platform includes a set of tools for designing and managing workflows, a programming model for implementing workflow logic, a rules engine, and a workflow runtime execution engine.

BizTalk Orchestration Services represents a new way to approach designing, deploying, and maintaining distributed business processes. BizTalk Orchestration Services are used to design business processes that manage the overall business logic. BizTalk Server lets you orchestrate your business processes by combining a run-time engine with a design-time tool called BizTalk Orchestration Designer. Using BizTalk Orchestration Designer, you visually coordinate all of your business-to-business orchestrations on screen in a Microsoft® Visio® graphical interface. BizTalk Server then saves your workflow in an executable file called an XLANG schedule, which a run-time engine uses to execute your business processes.

A good explanation of the difference can be found at Lamont Harrington’s post here: Windows Workflow Foundation vs BizTalk Server

Ultimately, when making the decision between these two approaches, the best thing to do is look at your system borders.  Windows Workflow is a great choice when you need to stay within the boundaries of an application, Biztalk is great when you need to cross application/system boundaries.  It is why BizTalk always wins out when dealing with enterprise application scenarios.