What is the difference between displacement and planing hulls?

Displacement hulls are designed to move through the water with a minimum of propulsion. They will have a large underwater profile and will ride comfortably although slowly. Trawlers and large sailing vessels are displacement vessels.

Planing hulls are designed to actually rise up and ride on top of the water when power is applied. They require considerably more horsepower to get the boat up but they can attain much higher speeds from the reduced friction of moving on top of the water rather than through the water.