<p>What is the difference between publishing a website with visual studio and just copying the files over to the server?  Is the only difference that the publish files are pre-compiled?</p>

I believe you are correct in your assumption. It has been my experience that the only difference is that published files are compiled.
Visual Studio® 2008 Web Deployment Projects
is a nice enhancement for customizing your build scripts for both your Websites and Web Applications.