In both cases the author:
- bears the costs of publication
- owns the book
- keeps the sale proceeds.
With today's vanity publishers and self-publishing services, authors typically keep copyright, but they grant rights to the publisher or self-publishing service either exclusively or nonexclusively. So their rights are encumbered. And they don't keep sales proceeds. They receive a royalty on sales, with the publisher or self-publishing service keeps the rest (in effect, they're paying twice: a lump sum for the service, and a smaller sum each time a book is sold).
Strictly speaking (to my mind, at any rate), any form of paid publishing--other than true self-publishing, where the author arranges for all aspects of publication him/herself--is vanity publishing. It's politer, of course, to call it self-publishing--though not truly accurate, because if you use a service like Xlibris, you aren't publishing yourself; you're buying a package of services from the company, which has a claim on your rights and keeps most of the income from sales.
However, I think a distinction needs to be made between straightforward fee-based publishing service providers like Xlibris, Lulu, BookSurge, and others, and companies that charge a fee or impose a cost yet present themselves as "real" publishers. So I think it makes sense to refer to the Xlibrises of the world as "self-publishing services" and to the deceptive fee-chargers like American Book Publishing or Strategic Book Publishing as vanity publishers.
- Victoria