Legalisation: pretty self explanatory, it's legal, no restrictions.
Decriminalisation: no longer a criminal offence, but as it's not legal nominal action may be taken, eg. forced to throw your stash down the nearest drain. If you're being a problem, eg. toking outside a school, a fine may still be applied or another criminal offence that covers the angles.
Currently cannabis in the UK is a Schedule B drug, meaning it's one below heroin and crack, it is not decriminalised. The current position of most constabularies in the UK is that they don't have the man power to police the proliferation of cannabis. It's still very much criminal, they just aren't chasing it, other than grow factories and those causing unacceptable grief (either upsetting neighbours repeatedly, or nearby such as a school). If caught in possession up to 5 years prison, supply up to 14 years. That'd be quite unusual though, you'd have to be asking for it.
This is one of the things I hate about UK laws at the mo, grey areas: "we won't do anything", until they do.