Hope this helps: Estaba + gerundio: You talk about an action in progress on a definite moment in the past. . –Ayer te llamé a las cinco. ¿Dónde estabas? –Estaba en el jardín. Estaba regando los rosales. and, usually, gives more information about an action that happened in the past: Cuando empezó la fiesta, la música ya estaba sonando

That's not an easy question, they are very similar and they are used in the same way. "Preterito imperfecto" is when someone WAS doing something(Yo saltaba, Tú corrías, Él lavaba...) and what you call "estaba haciendo" form doesn't really exist, It's called "perífrasis verbal", for example " Estaba" + a verb in gerund is a "Perífrasis" ( Yo estaba haciendo la cena, Tú estabas cantando una canción, etc), and the Spanish language has a lot of "Perífrasis verbales". Anyway on the " Estaba haciendo" form, It means "The subject + estaba haciendo + the thing that He was doing". In the 90% of the cases you can use both and the other 10% is not important, I mean, every one will understand what you're trying to say because there are some cases where "estaba haciendo" + the thing you were doing sounds better and vice versa. I'm not sure if you could understand what I'm trying to say because It's very hard to explain the difference between these two words, sorry if you couldn't understand, ask me if you need more help Edit: You should use the estaba haciendo form for saying things that you did, but not verbs. For example, "Estaba haciendo la compra" is ok, but "Estaba haciendo compra" or "Estaba haciendo compraba", etc is wrong