The fundamental difference between TiddlyHoster and TiddlySpace comes down to where the UI is focused. In TiddlySpace nearly everything happens inside a TiddlyWiki. That TiddlyWiki contains lots of extra plugins and content to make that stuff happen. In TiddlyHoster the UI (for managing bags and recipes and such) is in more traditional web pages and the TiddlyWikis that you can access are entirely optional, and only have a very small number of extra plugins (those required to save content back to the server).

TiddlySpace is fairly friendly and user-oriented but (thus far) lacking in granular control over bags, recipes, policies and filters. TiddlyHoster sacrifices some friendly for greater access to bags, recipes, policies and filters.

If you have to choose just one, for many people TiddlySpace is likely the better choice: it's easier to use and is receiving a lot of attention. However if you are someone who likes to twist the knobs or has special access control and recipe management needs, TiddlyHoster might appeal to you.