The most obvious difference is their transfer capability. CAT5 has four pairs of twisted copper wire and supports up to 100m of Fast Ethernet (100Mbps) transfers. Although CAT5 has four twisted pairs, it only makes use of two pairs. CAT6 also has four pairs of twisted copper wire which supports Gigabit Ethernet (1000 Mbps) of up to 100m. Unlike CAT5, CAT6 takes advantage of all four pairs. CAT6 has a 2x transfer rate compared to CAT5 but due to the higher price tag of CAT6, it isn't used alot yet.
There is also CAT5e (enhanced). Like CAT6 is makes use of all four pairs but it isn't quite as fast at transferring as CAT6 but does support Gigabit Ethernet so is a popular choice.
There is also talk of CAT7, but thats going beyond your question.
Hope thats of some help.
This is repost from http://www.ozzu.com/hardware/cat5-cat6-cable-t34232.html
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