You know what, this question gets asked every six months or so and we see the duck and roll answers above...
You were given the answer and the differences have to do with different milling of the internals of the lower and one extra hole drilled for the auto sear. From there, the fire contol parts are different including the carrier, hammer, disconect, trigger, selector, PLUS the auto sear that is only in an M-16...
Here are a few pics that will help...
[img]http://quarterbore.com/images/nfa-ar-m16-01.jpg[/img]
[img]http://quarterbore.com/images/nfa-ar15rr-01.jpg[/img]
[img]http://quarterbore.com/images/nfa-ar15rr-02.jpg[/img]
Now, ignoring the posts above, the difference between an AR-15 and M-16 lower is more accurately described as posted and shown. The price for an AR-15 lower is about $90 or so for many stripped ones as opposed to about $7000 or more for a transferable M-16 lower.
If you want more information, please see [url]http://quarterbore.com/ar15m16/index.html[/url] where I describe a few other items of scarry topic to the forum including the Lightning Link and Drop In Auto Sear (DIAS).
Now, I should add that there is a difference in SOME Upper receivers that make some receivers only work with an AR-15 and not the M-16...
[img]http://www.biggerhammer.net/ar15/uppers/searrelief_ar15_m16.jpg[/img]
The extra cut is needed to allow the GI Auto sear to function.
Now, if you drill that single little hole for the GI Autosear in your lower receiver, you have made an illegal Machinegun and you can spend 10-years in jail and $100,000 in fines and make a really good friend named "Bubba"...