I have both, and basically here's the rundown...
(1) Arcana Evolved uses more of the 3.5 rules than the 3.0 rules, so that's a pretty hefty revision.
(2) Arcana Evolved adds a very non-intrusive metaplot about the dragons returning. It gives some dynamism to what's otherwise a potentially stale setting. It repeats the information in Diamond Throne, but also adds new material.
(3) It includes a new race, and several other new options for existing classes. I can't point to all the differences, though. I know the Champion of Justice is new, and some class features incorporated the Arcana Unearthed errata.
(4) The Evolution mechanics are really cool - they add a lot to the setting, IMO. Basically, it adds new racial class levels for non-leveling races; and extends existing ones up to 6. These evolved levels are kinda special and tough to get - and it might kill you in the process.
That's about all I can remember, other than how colorful the Evolved book is. If you don't own either, I'd go for Arcana Evolved... It's well worth the additional price, IMHO, even if you don't end up using it.
I ran a wonderful campaign in it, but when we got to 12th level or so, it got to be too much. Magisters (and even Greenbonds with just a feat or two) get massively more powerful than 3.5 Wizards, and the bookkeeping is a bit more than in default 3.5. I know that Arcana Unearthed promised more balance to spellcasting, but I can only assume that claim was made in jest.

It's much easier to get insanely high scores given racial levels, and the better-than-wizard-or-sorcerer spellcasting system ensures they can spam the best spells over and over again, at lower or higher power as the situation demands. Nevertheless, it's an amazing setting with exciting classes and races that's not quite like anything I've seen before or since.
EDIT: At one time, there was a conversion document on montecook.com, but I haven't looked there for a bit. You might be able to find it, still.
-O