Big rule differences:
♦ Spells and ranged attacks must affect the nearest target. So a single dire rat may prevent you from aiming your lightning bolt at your enemy, since you'll have to include the rat, your nearest enemy, in the bolt's area of effect. Likewise, if you have a ranged healing spell, you'll have to cast it at the nearest ally creatures, even if said creature hasn't lost any hp...
♦ Level=save (with a few exceptions)
♦ Unlimited AoOs, but only on adjacent enemies (no reach AoO).
♦ Morale rules! When your hp get reduced below half their max, you must make a save at DC 20 or become panicked. (DDM's technical term is "rooting".) Contrarily to all other saves, you can add your commander's rating as a bonus to that save.
♦ Four factions. All creatures are categorized in the four combined alignment (LG, CG, LE, CE). Some may belong to two alignment (so you don't have "NG", instead you have "LG/CG") or all (so you don't have "N", but "Any"). As a result, slaad are CE (rather than CG/CE), myconids are LE (instead of LG/LE), dire lions LG/CG (rather than Any), and celestial dire badgers too (instead of CG). In other words, D&D alignments may not correspond to DDM alignment.
♦ You only ever roll a d20. For attack, saves, concealment, etc. You don't roll damage.
♦ All damage are lethal, of course. So regeneration and fast healing are one and the same.
♦ You can't be prone or crouching. You can't be on higher ground. You can't climb atop a statue, for example, in order to shoot enemies with a crossbow while there.
♦ No Five Foot Step! Except for the few units who have the Sidestep special quality, a 5-foot step qualifies as a full fledged move.