'Skilled' usually describes the person - he's a skilled musician. 'Skillful' usually describes how someone does something - he plays skillfully.

"skilled" = to have a skill and be competent in its use "skilful" = highly-skilled

I like Su.Ki.'s explanation. I think it is the clearest and the most accurate. Let's look at one example: Charles is a highly skilled equestrian, but he was not very skilful last weekend: he fell from his horse and broke his arm.

The do have similar meanings. We use skilled as describing someone's specific skill. Example: He is highly skilled in the field of bio engineering. Skillful is used as describing an attribute. Example: He is a skillful basketball player. They generally can both be used.

There are also instances where customary usage is so set that to replace one with the other becomes "odd". For example, in economic analysis, "There is a shortage of skilled workers in the labour market." Here the focus, as would be correct in economic analysis, is on the knowledge and training of the persons concerned. We do not normally say, "There is a shortage of skilful workers in the labour market." (or it would something entirely different) Here the focus would be on their performance, and it would be absurd because it is impossible for an economist to predict aggregate individual performance. It is not his job either.