In terms of common usage, the words "ego" and "self" are roughly interchangeable, indicating the perceived boundaries of each individual, both physical and mental. But in Buddhist thinking, both the words ego and self are merely conventional expressions of concepts which do not refer to anything which actually exists, because such perceived boundaries are illusory. 
However, identifying these concepts as illusory spawns differing conclusions for people at differing stages of spiritual development. It would be utterly impractical, not to mention unwise, for us to adopt the view that "there is no self," or that "we really don't exist." Quite clearly there is an "apparent self," or an "emergent self" (a perception which emerges from our experience). The important issue to my own perspective is not how to rid myself of this perception, but rather how to use it most productively, and how to avoid using it foolishly.
EGOISM v EGOTISM: For us worldly (non-renounced) practitioners of the dharma, in the beginning stages we can utilize various mundane motivations to help us "strive" to make spiritual progress. In our daily life, paying heed to such perceived boundaries between individuals, whether they be illusory or not, has some practical value which cannot be ignored (i.e., egoism, which helps to keep us earnestly and vigorously walking the path) -- and also some risk, which cannot be ignored (i.e., egotism, which leads us off the path). After all, it is the illusory boundaries of self or ego which give a sense of who it is that is either walking or leaving the path, and until you have achieved a truly rarefied state of consciousness, that illusory sense of self is what keeps us moving forward and improving ourselves.

Thus ego is like money, in a sense -- it is something which can be used creatively or destructively, for benefit or for harm, depending on the consciousness of the user. On the other hand, one could observe that ego is also unlike money, because the freer you are of ego, the freer you are from worldly pressures!    -- David Lourie