Basically, Axis I disorders are felt to be more serious, or more acute, while Axis II disorders are considered chronic and more part of who a person is. Axis II has the personality disorders and mental retardation, and the rest of the mental disorders are Axis I. There is quite a bit of disagreement about what really should be where. I would argue that pervasive developmental disorders would fit better on Axis II, for example. Some people say that Axis II disorders are less treatable. The guy who taught my personality disorders class claimed that personality disorders are permanent. But others do consider them treatable, and I feel that personality disorders can be treated and people can recover from them if we are willing to do the work that it takes to heal. Not everyone who has personality disorders is interested in changing, however, and so they aren't going to.

The Psychodynamic Diagnostic Manual considers DID (Dissociative Personality Disorder) to be a personality disorder, but the DSM has it on Axis I.

And then, Axis III specifies medical conditions, Axis IV lists life circumstances that have something to do with the problem, and Axis V is the GAF score (see the thread about that).