It's quite possible that someone will provide a truly detailed answer here, but I've always found this post from Robert Sosinski to be a great explanation of the subtleties between blocks, procs & lambdas.
I should add that I believe the post I'm linking to is specific to ruby 1.8. Some things have changed in ruby 1.9, such as block variables being local to the block. In 1.8, you'd get something like the following:
>> a = "Hello"
=> "Hello"
>> 1.times { |a| a = "Goodbye" }
=> 1
>> a
=> "Goodbye"
Whereas 1.9 would give you:
>> a = "Hello"
=> "Hello"
>> 1.times { |a| a = "Goodbye" }
=> 1
>> a
=> "Hello"
I don't have 1.9 on this machine so the above might have an error in it.