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A gateway acts as a conversion from one protocol to another or in the case of VoIP from the VoIP network to the POTS network. A router works by looking at the IP address in the packet and decides if it is for internal use or if the packet should move outside the network (to the WAN). In a VoIP conversation, you would have a gateway that works for any calls that can not be carried via IP and it moves them to a POTS connection. You generally need both.

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Posted by kparikh

Router is basically used for routing and gateways is used for communicate between two main country domain a router may be a gateway.

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Posted by HamidAliKhan

A gateway is (typically) a hardware device, or possibly a computer, that provides access to some upstream network and then offers and distributes it down to machines connected to it. In essence, imagine a gateway device as the doorway between a larger network (say, the Internet) and a more local, private network (such as a corporate intranet). The gateway may also double as a firewall, restricting inbound access to unauthorized resources, providing NAT access to authorized end-users.

A router allows multiple devices to access one point of connection (such as an ADSL connection if the router's an ADSL router with a built-in ADSL modem, an uplink to the Internet if being used on a network, or another computer being used as an upstream proxy server). Routers commonly have DHCP servers installed, to provide connected devices with an INTERNAL ONLY IP address on a private subnet range.

From:http://www.answerbag.com/q_view/10605

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Posted by sagitraz