The mayjor difference is that if you are a co-author you can't delete the story or add tags. Those are the only differences I see. I'm a co-author for your info. :)

Transfering a story means you give that person all control of the story. They can, I guess you can say do what they want with it.

If you do transfer it to your co-author you can no longer edit the story and you no longer have control of the story. Which means you can't edit it at all. (Because it's like saying I give this to you and you take care of it.) If you want to continue to edit it after you transfered, you can have whoever you transfered to, make you the co-author so you can go through and edit chapters.

So like I said there's not much of a difference between author and co-author. Just that as co- author you can't delete the story or add tags.

Hope this helps. If you are still confused feel free to PM. I'll try and explain it further.

*i mean i'm confused by what you're asking.

i dont understand too... somehow i think you're saying the same thing ? O.o

Ok.
You get the co-author right? So, like you added ur co-author. That co-author has the authority to change, add, or edit our fic.
but, she CANNOT delete it (I think)

The Transferring is when you GIVE her the fic, making her the ultimate author
wow. ultimate author XD

say what? don't understand =.=
never made someone a co-author xDD