What is difference between user privileges and permission?

As the question was posed in the Windows section, I'll answer this from Microsoft's perspective.

User rights generally refer to logon capabilities: who can logon interactively, as a batch job, as a service, over the network, over Terminal Services, etc. These all require a certain "right" and these rights can also be denied to groups or individual users.

Permissions relate to the capability of accessing an object, such as a file, a registry entry, a service, a printer, a share, etc. Again these can be granted or denied but there is more granularity here as there are several permission types: read, write, delete, etc. Permissions are collected into Access Control Lists (ACLs) with each entry being termed an Access Control Entry (ACE).

To complete the trio in common parlance, there are privileges. These relate to overriding capabilties within Windows such as backup, restore, take ownership, debug, etc. If you hold the backup privilege, for example, you are allowed to read all files, regardless of permissions on those files. Privileges trump permissions.

Confusingly, privileges are sometimes referred to as rights, even in official MS documentation. in the days of NT4, some were also called "abilties" so you'll note the careful use of the generic term, "capability" above.

And finally, in the Novell world, permissions are called user rights.