Layer 3 switching as you say is routing done in hardware as opposed to software. Generally speaking a router will route packets in software ie. the intelligence to make the routing decision is contained within the IOS code.
A layer 3 switch however has dedicated ASIC ( Application Specific Intergrated Circuits ). These are a bit like the CPU of your PC except that they are specialized in what they do and hence more effecient. On a L3 switch it these chips that route the packets.
TO be honest you have pretty much summed up the major difference in your question and L3 switching was used primarily as a marketing term when it originally came as everybody knew Layer 2 switching was fast and routing was slow.
[toc:faq]The ProblemOn traditional switches whenever we have a trunk
interface we use the VLAN tag to demultiplex the VLANs. The switch needs
to determine which MAC Address table to look in for a forwarding
decision. To do this we require the switch to do...
[toc:faq]Introduction:Netdr is a tool available on a RSP720, Sup720 or
Sup32 that allows one to capture packets on the RP or SP inband. The
netdr command can be used to capture both Tx and Rx packets in the
software switching path. This is not a substitut...
IntroductionOSPF, being a link-state protocol, allows for every router
in the network to know of every link and OSPF speaker in the entire
network. From this picture each router independently runs the Shortest
Path First (SPF) algorithm to determine the b...