What is the difference between Customization and Personalization?
Personalization is when the system you are using tailors itself to you and your behavior. A good example of this is Amazon "noticing" what you are buying and changing their front page to feature similar items.
Customization is when the user explicitly changes things – font size, colors, layout, etc.
For a while the big trend in design was in supporting the ability for the users to customize their experience. In the past couple of years that has really fallen in favor to personalization. I have a theory as to why.
When you provide an experience that the user can customize the burden/effort is all on the user… and most users don't like to "tweak, they like to "do." I've tested multiple designs that supported customization with people and the unanimous reaction has been "that's nice, but I wouldn't do that."
Providing a personalized experience that "knows" the customer and can make suggestions is a much more "friendly" interaction that the user can accept or ignore… but in this case there is no or very little cognitive effort on the part of the user.
(For a "case study" that reinforces my opinion, just look at Google. Their customizable portal iGoogle is listed WAY down in their list offerings, when it was once a primary focus… and a prime selling factor in their web ad platform is the ability to serve up personalized ads.)