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ANSWER
"Mistrust" suggests vague doubts. "Distrust" is rather more emphatic suggesting positive suspicions and even a complete lack of trust. Also "mistrust" is the preferred form when expressing doubts about oneself. ANSWER
Mistrust means "to doubt, to lack confidence in," as in I mistrust his ability to persuade her. Distrust means much the same but adds suspicion to the mix: He distrusts her because he thinks she'll cheat him.
(The Columbia Guide to Standard American English. 1993.)
http://www.bartleby.com/68/6/3906.html
Distrust is a formal way of not trusting any one party too much in a situation of grave risk or deep doubt. It is commonly expressed in civics as a division or balance of powers, or in politics as means of validating treaty terms. Systems based on distrust simply divide the responsibility so that checks and balances can operate. The phrase "trust but verify" refers specifically to distrust.
Distrust should not be confused with mistrust, which is believing that a particular party has a hidden agenda. When such is the case, however, distrust plays a role in minimizing the power of specific individuals with roles in "the system." For instance providing the benefit of the doubt to someone accused of a crime.
An electoral system or adversarial process inevitably is based on distrust, but not on mistrust. Parties compete in the system, but they do not compete to subvert the system itself, or gain bad faith advantage through it - if they do they are easily caught by the others. Of course much mistrust does exist between parties, and it is exactly this which motivates putting in place a formal system of distrust. Diplomatic protocol for instance, which applies between states, relies on such means as formal disapproval which in effect say "we do not trust that person". It also tends to rely on a strict etiquette - distrusting each person's habits to signal their intent, and instead relying on a global standard for behaviour in sensitive social settings.
http://infao5501.ag5.mpi-sb.mpg.de:8080/topx/archive?link=Wikipedia-Lip6-2/1474763.xml&style
Mistrust is the act of believing that a particular party has a hidden agenda or ulterior motive. This can happen in everyday life in situations where the parties otherwise trust each other, but find themselves questioning that trust. Mistrust is different from distrust, in which the lack of trust seems clear to the believer (and usually to the recipient), as in war.
http://www.reference.com/browse/mistrust
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