Can someone please explain the difference between an AFI and a GFI and where would you use one over the other?

Thank-you!

GFI'S are for outside, near water, baths, kitchens,
Arc Fault are for bedrooms an sleeping areas.
I heard something about making Arc fault being used other places also? Not Yet.

Just to add:

GFCI's are intended to protect personnel. It's function is to de-energize a circuit or portion thereof within an established period when current to ground exceeds the value for a class A device. GFCI's can come as a breaker (to protect an entire circuit), or as a receptacle (to protect a load down stream). Can be used in a number of places--depending on the install.

AFCI's are a little different. It's a device that's intended to provide protection from the effects of arc-faults by recognizing characteristics unique to arcing and by functioning to de-energize the circuit when an arc-fault is detected. Comes as a breaker, but industry is working on an AFCI receptacle. The new code will require AFCI's on most (not all) circuits, and must be a combination type. Currently, AFCI (depending on your jurisdiction) must be installed on all branch circuits that supply 120V single phase 15 or 20 amp oulets installed in bedrooms--providing protection for the entire branch circuit. This includes smoke detectors.

Just to add to the excellent info given so far, check the local code on the smoke detector. Several states have taken exception the National Code and do not want the smoke detector on the Arc fault circuit. The thinking is if there is an Arc Fault, that may have started a smoldering fire, the detector may be rendered useless if the AFCI has tripped.

Some think the required battery will pickup after the power loss, but some think since many people are no so good at keeping fresh batteries in their detectors better to not rely on the battery.