CodeMirror and Ace both have a long history of sane competition, and copied many of the ideas from one another. So much, in fact, that whenever I find myself in front of an Ace editor, I open up the DevTools and change the CSS to make the cursor 1 pixel wide. They have pretty much the same cursor display system!

A great difference, in my opinion, is the syntax highlighting systems. Ace's is more rule-based (as in, regex matches and regions), while CodeMirror's is more programmatic, which helps its JS mode show local variables in a different color.

There are also differences in the data structures used internally, afaik. Marijn can probably talk more about that.

On a different note, CodeMirror is being seriously considered independently in WebKit's and Firefox' DevTools, built-in. You may soon use it every day without even knowing!