Difference between user control and custom control

w.r.t ASP.NET 2.0, custom controls have no design surface for adding custom controls, making custom controls more code intensive. User controls on the other hand have a graphical interface, making it much simpler to code and design them.
But user controls cannot be shared among projects and cannot be extended to get all the features of a Web Part.

Reference:Peter Vogel, Web Parts and Custom Controls with ASP.NET 2.0