Well, its how you burn energy.
If its a slower and easier pace, then you can burn fat directly.
During your day to day life, you burn fat. Even when sitting down. (or at least that is what I understand)

When you are exercising harder, your body needs a type of fuel that burns faster. In most cases its the sugar that's in your blood stream and in other cases, it could be protein from your muscles.

It's something you need to be aware of and constantly balance. If you want to burn fat, the trick is (from what I have researched) is to exercise and still able to hold a conversation with someone else. Meaning, you are not breathing too heavily to not be able to talk regularly.

The thing with fat burning is really the time you put in and not the intensity.
If it was just go all out and lose weight in 1-2 days for some deadline or social event, everyone would be doing it.

I have a book I've briefly read and it might be something you may be interested in reading:
http://www.amazon.co.uk/Slow-Burn-Faster-Exercising-Slower/dp/0062736744/

Good question. I'm guessing that you should be working out considerably longer at the fat burn level as compared to the cardio level if you expect to see results.