The differences are the following:
1. In compatibility mode: Text fields are limited to 32,000 characters while Alpha fields are limited to 255 characters.
In Unicode mode: Text fields can store a maximum 2GB of character data. Alpha fields are unchanged in Unicode mode.
2. Similar to Blobs and Pictures, Text fields may now be stored outside the record itself. Alpha fields are still stored with the record.
(Text fields can be stored with the record, or not, by altering the property "Stored in the Record" within the structure inspector)