The difference between S17 and H17 rules in Blackjack pertains to the dealer's behavior when holding a soft 17, which is a hand that includes an ace counted as 11, totaling either 17 or more. Under S17 rules, the dealer must stand on a soft 17, while under H17 rules, the dealer is required to hit. This distinction affects the game's strategy, as allowing the dealer to hit on a soft 17 generally increases the house edge, making the game more challenging for players.