Blocks is the codename for the corresponding back end technology. It comprises a rendering model that allows dynamic and static parts of a page to be separated, and related technologies for creating site layouts and page layouts and merging the two.
Tiles refers to the dynamic parts of a page in the Blocks rendering model. A tile is really just something that can be rendered individually or merged into a page. All tiles have a unique URL. Plone 4 will ship with a framework that makes it easy to create new tiles, where the simplest possible tile is just an HTML file or page template, and more complex tiles can include user-editable settings, persistent data (attachments) and so on.
Note: This project area is expected to live only for as long as the various Deco, Blocks and Tiles propotypes are being developed. If and when this infrastructure is merged into Plone, issue tracking and development will move to plone.org.