Pre-Approval occurs when you give them copies of pay stubs and other documentation (such as tax returns, etc) and they send it all to an underwriter. When the underwriter comes back and says "yup - everything checks out - we can give you a loan for X dollars so long as the home appraises" - THEN you have a Pre-Approval.
A pre-qual is generally not worth the paper it's written on. A pre-approval can help you have some extra negotiating power when you're dealing on a house!
If I can be of any further assistance, please don't hesitate to contact me at http://www.HernandoLuxuryHomes.com - I'd be happy to help however I can!
The underwriter is the most important part of this equation. A full lender pre-approval will provide the best terms for the seller and if presented in the best light, make you the most preferred buyer should there be multiple offers on a property.