Sorry your brother's a jerk

As for the question, I'm not too sure there even is a very strong distinction. Your personality/character is part of your mental health, so a mental illness messes it up. It's like asking "is it a gastrointestinal disorder or a stomach flaw?"

But I guess you could say a mental illness is a more extreme version of a character flaw, and it's like a spectrum without a clear cut dividing line. How spacy do you have to be before it's ADHD? How sad do you have to be before it's a depressive disorder? How short do you have to be before it's Pathological Short Stature? How sleepy do you have to be before it's narcolepsy? The diagnostic criteria for those conditions defines the exact "cutoff." It's pretty subjective, unfortunately, but if you have been diagnosed, the professional who diagnosed you decided you were on the mentally ill side of the line.

According to psychology (not psychiatry?) the criteria for considering something a disorder or symptom of a disorder is that it fits all these criteria:

• Maladaptive - it's bad for you.
• Unjustifiable - i.e. if you're feeling fearful when you're about to be mauled by a grizzly bear, that doesn't mean you have an anxiety disorder.
• Disturbing - it upsets you or someone else.
• Atypical - most people don't have the trait or don't have it as much.

It seems the DSM-IV (psychiatry) says this: "In DSM-IV, each of the mental disorders is conceptualized as a clinically significant behavioral or psychological syndrome or pattern that occurs in an individual and that is associated with present distress (e.g., a painful symptom) or disability (i.e., impairment in one or more important areas of functioning) or with a significantly increased risk of suffering death, pain, disability, or an important loss of freedom. In addition, this syndrome or pattern must not be merely an expectable and culturally sanctioned response to a particular event, for example, the death of a loved one. Whatever its original cause, it must currently be considered a manifestation of a behavioral, psychological, or biological dysfunction in the individual. Neither deviant behavior (e.g., political, religious, or sexual) nor conflicts that are primarily between the individual and society are mental disorders unless the deviance or conflict is a symptom of a dysfunction in the individual, as described above."