They are pretty much equivalent. There's a subtle difference. "I gave them a copy of Marc Chagall's 'The Birthday' as a wedding present, and when I visited them it was hanging on the wall." Here, "was hanging" is better than "hung." "It hung on the wall for the rest of their lives." Here, "it hung" is better than "it was hanging."

With no context to suggest otherwise, I think they can be used interchangeably.