Apples and Oranges. They are alike in the fact that they are Shepherd dogs and operate with a high amount of drive. Malinois with far greater drive (in general). Malinois are very hyper, drivey, reactive dogs. For a regular person they are a NIGHTMARE...for a trainer, they are EXCELLENT. This is the type of dog who learns fast, when trained correctly LOVES working and has a real "Don't stop" attitude. For a pet owner it's a burdensome dog that has to be watched like a hawk 24/7 or it'll destroy something, bite something, kill something, hurt itself ect.
German Shepherds from working lines (only going to mention working line GSDs because comparing any other lines of GSD against a Malinois is like comparing a blind, 3 legged kitten with no teeth to a Siberian Tiger) are much calmer dogs. Not as reactive. They're still a trainers dream, just a different type of trainer. I've heard a saying that goes "A German Shepherd does what you tell it to, a Malinois does it before you tell it, a Dutch Shepherd does it before you think it"...I find it to be backwards. When stimuli is introduced the Mal has to be reeled in, I can rely without so much as glancing at a good GSD to hold position (of course with lots of good training you can do the same with most mals as well).
The MAIN difference is the drives they work out of. Working dog guys want a hard dog, a dog that can be corrected, HARD, and not lose too much drive and keep working. These dogs achieve this in 2 very different ways. Belgian Malinois take HARD corrections out of prey drive (again, a generalization). "I will take whatever is dished out at me, pressure or corrections or even pain so that I can get my REWARD" is a Mal's mindset. German Shepherds take pressure and pain out of hardness of character "I will take pressure, pain, and corrections because I'm not bothered by them, I want to DOMINATE the bad guy". This is why I personally prefer GSDs. Their livable drive in day to day life is wonderful, it means they can be house dogs quite easily (in general, again). But the main thing I want in a Police or Military Working Dog is an animal who bites out of anger....hatred even. I want a dog who can get MAD and forges on with the will to cause pain to what causes him pain. These dogs have true aggression, social and fight drive. They bite you because they don't like you and want to hurt you. They bite because they want to win, dominate, and own you. Malinois bite because...they like to bite! To a lot of them it's a game, to a minority of them it's serious business, and to a greater minority still, work (bite work) is viewed the same way a hard GSD views it. I like those Malinois, sadly they are a huge minority. These types of dogs can only be found in the top few percent of NVBK and especially KNPV dogs (KNPV Mals are often mixtures in varying degrees of GSD hence their size and hardness...again, in general).
Both can do the same jobs to varying degrees. If like some people, a lot of people, you don't care WHY a dog bites as long as he bites then the Malinois is the bitingest, driviest, workaholic there is. If you want a old school, rough and tumble and ready to rumble simply for the chance to kick some butt...then go with the GSD...the GSD is the combat Marine of the dog world...they dig in and they hit hard and will die on the beach to get some. Malinois are more like a tactical unit, light and fast, they don't dig in with a fight or die mentality, they want to hit their objective, do damage and call it a day (in the Mal's case the objective is drive satisfaction)...I always did like the Marines mentality over all other fighting men though :)
-edit- Marna O and Greek...you're encompassing the GSD knockoffs. Show Line Shepherds are NOT GSDs, please don't compare them or even call them GSDs when we're talking about work. That said when we're talking strictly working line dogs, we have about 75% that'll work...if you take away the BUMS who have dollar signs for pupils aka people selling pups for 5 grand and adult elite super dee duper "pertektion" dogs for $50,000 then that number shoots up to 90% as well. There are kennels where I simply can not think of one bad dog they've produced (Peko Haus, Bungalow, Busecker Schloss, Antverpa dogs, Karthago dogs). When done correctly breeding good hard working GSDs is simple...it just ain't easy. Not many people in this country do the research. Most people in Germany are breeding for sport. I'm inclined to say there are now 4 types, the newest edition being the German Sporting Lines. If we pull those dogs out of the picture and stick with the REAL working dogs the GSD is doing just fine, he's alive and well.
Hard to find? Hardly! Call Jiri (either one) and know what you need and get a dog, call Josef and get a dog, heck call Chico and get a dog. In all the time I've known Chico I have yet to see him produce a dud (he only breeds a litter or 2 a year though so...but still, great accomplishment). When the motives for breeding are examined and broken down it's easy to see...the Working Line GSD is here to stay and a d*** fine working dog. He did a d*** fine job before anybody outside of Belgium and Holland had ever seen or heard of a Malinois.
Btw A'Tim is a good dog, that performance wasn't his best, but it shows at least a Mal with controllable drive (he didn't like giving up those fetched items tho' aye?). A'Tim was probably a dog who could do anything well...whether or not he was a serious dog (a civil dog) is up for speculation, from what I've seen from him he wants a suit, not to dominate a man. Again, A'Tim is a A/B dog, I like B dogs. Dogs like Endor...now THAT is a working dog, I'd take him over A'Tim or any other Malinois I've ever seen other than a young Turcodos ^.~