Illuminated books are highly decorated, while illustrated just have pictures. Some illuminated books might even have gold or sliver on the pages, which makes them look like light is coming out of the pages. lumi -->light

From Wikipedia: "An illuminated manuscript [or book] is a manuscript in which the text is supplemented by the addition of decoration, such as decorated initials, borders (marginalia) and miniature illustrations. In the most strict definition of the term, an illuminated manuscript only refers to manuscripts decorated with gold or silver, but in both common usage and modern scholarship, the term is now used to refer to any decorated or illustrated manuscript from the Western traditions." An illustrated book is a book that can contain any number or types of illustrations.