Differentiating between polynomial and rational algebraic functions involves understanding their definitions. A polynomial is expressed as a sum of terms with non-negative integer powers of x, while a rational algebraic function is a fraction where both the numerator and denominator are polynomials. Examples provided illustrate that expressions like 3x^3 + 2x + 1 and 3x^2 + (x + 1)^(1/2) are polynomials, whereas 2x + 3/(x^2 + 1) and (x/(x + 1))^X are rational algebraic functions. The discussion emphasizes the importance of recognizing the structure of these functions to classify them correctly. Understanding these distinctions is crucial for algebraic analysis.