If your document contains any images, then PDF Writer will make an awful mess of them. However, if your doc is text only, PDF Writer is fine.
Distiller is used for documents containing graphics, as you can control the font embedding, amount and type of compression for several different types of graphics (colour, greyscale, etc) when you generate the PDF. You can't do that with PDF Writer. I think PDF Writer doesn't even handle lines very well e.g. table borders, etc - makes them quite thick (or invisible). I also recall it had a lot of trouble with bullets and other special characters.