ISBLANK vs ISNULL

I am just wondering what could be differences between ISBLANK and ISNULL. I found following link http://shivasoft.in/blog/salesforce/salesforce-interview-questions-%E2%80%93-part-2/

But I think ISNULL works on text fields. What you guys think? Which one is to be used?

Answer

Per the documentation, ISBLANK() should be used instead of the legacy ISNULL(). The biggest difference having to do with text fields.

Use ISBLANK instead of ISNULL in new formulas. ISBLANK has the same
functionality as ISNULL, but also supports text fields. Salesforce
will continue to support ISNULL, so you do not need to change any
existing formulas.

This is further explained by,

Text fields are never null, so using ISNULL() with a text field
always returns false. For example, the formula field IF(ISNULL(new__c)
1, 0) is always zero regardless of the value in the New field. For
text fields, use the ISBLANK function instead.

Attribution
Source : Link , Question Author : doga , Answer Author : Mikey

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