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Assuming that you mean the difference between system software (the term used by Microsoft, Sony and Nintendo to refer to the operating systems used by the Xbox 360, PlayStation 3 and Wii respectively) and operating system, the difference is very minor.

If you mean the difference between system software and an operating system in the PC world, the term system software usually applies to things like the Device Manager in Windows or the Logical Disk Manager; software that comes pre-installed with the operating designed to interact with hardware on a fundamental level.

The term "operating software" when not used synonymously with "operating system" is usually used interchangeably with the term "system software" in the PC world, but it can also refer to software used to completely managed an external system.

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Q: Difference between system software and operating software?
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