Both are code reduce features and reusability Purpose.When 
we create Masterpage that is common to overall 
project,whereas user controls these r used when we have 
requirement on specific criteria.
Master page ex: INBOX,SPAM,DRAFT,TRASH etc in YAHOO WEBSITE

Master pages and user controils are two different concepts.

Master pages are used to provide the consistent layout  and 
common behaviour for multiple pages in your 
applications.then u can add the Contenetplaceholder to add 
child pages  custom contenet.
 User Controls:Sometimes u need the functionality in ur web 
pages which is not possible using the Built-In Web server 
controls then user can create his own controls called user 
controls using asp.net builtin controls.User controlsn are 
those with .aspx extensions and u can share it in the 
application.

Master has a conteact plceholder where u can put child page 
in  this cph.

when user control is uses with in page . u can not use any 
page in user  control

i think you can aslo page apply used with master page...
but control is only providing the add control not page...

I Think Both are same but key difference is that , we can
not use mater page in user control................

master pages can not be cached.
user controls can be cached .

Some times Javascript function may not work in master pages.
but in User controls, v can do server side code as well as 
java script code.

Benefits of ASP.NET 2.0 include:

1) A wide array of new controls, such as GridView control, 
MultiView, Wizard and FileUpload.
2) Superior separation of design and content, enabling 
developers and Web designers to work together.
3) A new model for compiling and distributing applications.
4) Customization with Web Parts.

Bug in ASP.NET 2.0:-
If you have a control on a page that is marked Read-Only 
and EnableViewState is set to false on the Page, the 
ReadOnly value will no longer post back in ASP.NET 2.0 - 
the value gets lost. This even though the value is actually 
returned in the POST buffer.

This behavior is also different than 1.1 which (correctly I 
say) posted back the READONLY value.

Master Pages

Additional things in ASP.NET 2.0
1. Partial Class
2. Generics
3. New control like grid view,masterpage
4. More event in Page Life cycle
5. Incorporated Classic ASP style save functionality, no 
needs to compile each time for small modification

Asp.net 2.0 enhanced with many new features.

* Partial Classes
* Master pages
* Skins and Themes
* Roles and MemberProfiles
* Generics
* Added many new server contols like      
  GridView,DetilsView,FileUpload etc..,
* Web Personalization - Web Parts
* New Folders lime App_Browsers,App_Code,etc..,

In asp.net1.1 IIS should be installed by us.But in asp.net 
when install asp.net IIS automatically will be installed

In ASP.NET user have to install the IIS. But In case of 
ASP.NET 2.0 IIS is coming with the installation process. 
another facility is the master page which is in ASP.NET 2.o 
But not in ASP.net 1.1.