What is the difference between applying css rules to html compared to body?

There is no real difference (if you’re just talking about where to apply background, otherwise BoltClock’s answer to this other question is a better fit). html is an element, just like body is.

Both are valid choices, and both will both work in all common browsers.

The YUI Reset for instance, chooses to set a background on the html element instead of body:
http://yui.yahooapis.com/3.3.0/build/cssreset/reset.css

This requires that you set your background on html, for instance see: can’t change body background color using CSS reset

See: http://dev.w3.org/csswg/css3-background/#special-backgrounds

The background of the root element becomes the background of the
canvas and its background painting area extends to cover the entire
canvas, although any images are sized and positioned relative to the
root element as if they were painted for that element alone. (In other
words, the background positioning area is determined as for the root
element.) If the root’s ‘background-color’ value is ‘transparent’, the
canvas’s background color is UA dependent. The root element does not
paint this background again, i.e., the used value of its background is
transparent.

And:

For documents whose root element is an HTML HTML element [HTML401] or
an XHTML html element [XHTML11]: if the computed value of
‘background-image’ on the root element is ‘none’ and its
‘background-color’ is ‘transparent’, user agents must instead
propagate the computed values of the background properties from that
element’s first HTML BODY or XHTML body child element. The used values
of that BODY element’s background properties are their initial values,
and the propagated values are treated as if they were specified on the
root element. It is recommended that authors of HTML documents specify
the canvas background for the BODY element rather than the HTML
element.

What that wall of text is saying is demonstrated here:

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