Mastic is a premixed organic adhesive which is ideal for installing ceramic (not stone) in dry locations on walls when the tile is 8x8 or less in size. It requires air to dry and as such, larger format tiles will require an extended drying time prior to grouting. Tiles larger than 8x8 can take days or weeks to dry to the center of the tile. It does offer a great initial grab for vertical surfaces but cannot be used to build up when needed. While it has great shear bond strength, it lacks in compressive strength, meaning it will not support loads well making it a poor choice for floors. When exposed to prolonged moisture, it can re-emulsify making it a poor choice for wet areas such as shower and tub walls.
Thinset is a mixture of portland cement, silica sand and moisture retention agents as the portland cement needs to stay properly hydrated to cure correctly.
Some contain nothing else and are referred to as "unmodified" or "dryset" mortars. The bag will say "meets or exceeds ANSI 118.1" These can be used as is mixed with just water for installations where an unmodified is appropriate, such as the bedding layer for many cement boards or when specified by the manufacturer, such as for setting tile or stone over Ditra or Kerdi membranes.
Some also contain spray dried polymers that enable it to bond to more difficult to bond surfaces or applications requiring properties specifically designed into that particular thinset. These are referred to as "modified thinsets" and get mixed with water only. These are good for general purpose applications, such as setting tile over a slab or cement board in wet or dry areas. The bags will say "meets or exceeds ANSI A118.4" or "118.11" or both.
Drysets cure by chemical reaction only when water is added to the portland cement. Modifieds both cure by chemical reaction of the portland cement and drying out of the polymer component. Higher modified thinsets will often benefit from an extra day of cure time prior to grouting when used under larger format tiles to give the polymer component greater drying time.
In exterior applications or specialty applications such as glass tile, an unmodifed or dryset mortar can be mixed with that manufacturer's liquid polymer admixture instead of water. That combination gives, in general, a higher shear bond strength than a highly modified thinset.
When higher bond strength is desired, some mistakenly think adding an admix to an already modified bagged thinset would make an even stronger thinset. Though it might sound reasonable, it actually results in a weaker product as there is not sufficient ratio of water in the mixture to both emulsify the dry polymers and to properly hydrate the portland cement component of the bagged thinset.
Thinset offers sufficient compressive strength to properly support tiles under load such as they are on floors and because it is a cement product, it will never be affected by water when used to set tile in wet areas. Thinsets can also be used for build up of anywhere from 1/4" to 3/8" thick as needed.
In cases where build up might be needed that exceeds that amount, then medium bed mortars can be used. Medium bed mortars follow all the same details of regular thinsets as described above, but they can also be used for build ups of up to 3/4" in most cases.
Thinset comes in both gray or white varieties. The difference between the two is the iron content of the portland cement. Because the white thinset contains a purer portland cement, it costs more than the gray. When setting stone or translucent stone or glass or when using a light colored grout you want to use a white thinset. When used under cement board or with a daker colored grout, then a gray thinset will do.