I think the difference is purely in type/ duration of care. Generally daycares provide year round, all day care and preschools follow a school year calendar with Spring Break, Professional Development days et al. That said there are preschools that start only at 18mo-2 years such as School for Friends, which don't take infants but do provide all day, year round care. In terms of curriculum, it varies so greatly, you have to tour the schools and sit down for a discussion with the Head of School/ Director to see if it aligns with what you want for your child.
As far as downsides go, I don't know of any. Know people who sent their kids there and loved it. We applied a few years ago right as the former director was leaving and didn't end up going there as it seemed a bit chaotic with the turnover. At the time they were adding a 2-year class and we were told that it was highly likely we'd be accepted for admission (we were)
My sense is that it's somewhat tough to get in at the 18 month/ 2 year age, but older kids easily get in thanks to families leaving for free PK3.