Is there a difference between running the source command from the mysql command line client and '<' from outside it? if so, when should I use each? I can run the following commands: 

C:\myfolder&gt;mysql -uuser -ppassword 


Then from within the client do: 

mysql&gt;source C:\path\to\file.sql


Or I can do: 

C:\myfolder&gt;mysql -uuser -ppassword  &lt; C:\path\to\file.sql


Is there a difference between these two commands? if so, what is it and when should I use each?
They are the same, but you can use only one depending in which environment you are.

for example when you are in DOS/ linux prompt you can only run mysql.exe

in Mysql command  mode you only can use source.

so there is no need to change the environments to import the sql file.