Confused? me too, which is better, or what's the difference?

insulation

n 1: the state of being isolated or detached; "the insulation of England was preserved by the English Channel" [syn: insularity, insularism, detachment] 2: a material that reduces or prevents the transmission of heat or sound or electricity [syn: insulating material, insulant] 3: the act of protecting something by surrounding it with material that reduces or prevents the transmission of sound or heat or electricity

isolation

n 1: a state of separation between persons or groups 2: the act of isolating something; setting something apart from others [syn: closing off] 3: a feeling of being disliked and alone 4: preference for seclusion or isolation [syn: reclusiveness] 5: (psychiatry) a defense mechanism in which memory of an unacceptable act or impulse is separated from the emotion originally associated with it 6: a country's withdrawal from internal politics; "he opposed a policy of American isolation"

In short,
Insulation - protected by
Isolation - protected from

Does it make a difference sound wise as they are both "protecting?"

Insulation is often used where a problem is discovered after the event. 'Ringing' of valves, for example would use rubber rings, internal circuitry (PCBs etc) of most components use a silicon type mount.
Some forms of insulation 'deaden' the sound and make it sound constricted, and is not fool-proof at keeping outside vibration from affecting it. This of course is relative to the type of insulation used.
IMO effective isolation eliminates much of the need for insulation and helps reduce the possibility of both 'contact' and 'airborn' vibration.