What is the difference between chair rails and wainscot?

Chair Rail describes a molding applied to a wall anywhere from 24 to 48 inches from the floor running horizontally.

Chair rail with wainscoting panels underneath it is a timeless look. You can easily create the look of expensive recessed wainscoting with simple panel molding cut and applied as squares under the chair rail, and than painting everything below the chair rail (including the wall and the base molding) one color, and everything above it another color. This will give the illusion that the bottom is a wainscoting panel.