What is the difference between a timeline comment and an order note?

Both are for your team, and both show up in the order's history.

• Notes (the Notes box): type in Add a note about this order… and click Add note. Notes are listed together in their own box, so they're easy to find later, like "Customer asked for gift wrap". You can delete a note.
• Comments (the Timeline box): type in Leave a comment… and click Post. A comment sits in date order among the status changes and shipping updates, so it's good for recording what happened and when, like "Called customer, will collect Friday".

Use notes for instructions you want to keep in view, and comments for a running log.