The practical difference is same as "a" vs "an" in English--to make it easier to pronounce. It is easier to pronounce "во" in front of a consonant in most situations (but not all). And it is easier to say "в" in front of a vowel. The preposition "в" is more common if you look on a list of most common Russian words http://masterrussian.com/vocabulary/most_common_words.htm "в" is more of a norm "во" is more of an exception to make things easier to pronounce. If you doubt use "в" and you have better chance to be correct because it's more frequent :)) AZIZA gave good examples so I am not going to type any more good examples ;)

These two identical prepositions. " Во" is used instead " В " front of some combinations of consonant sounds. For example: - Встретимся в субботу? - Давай встретимся во вторник. ( вО ВТорник) - Он одет в ужасную одежду. - Во что он одет? ( вО ЧТо ) Увидеть во сне. (вО СНе) У неё конфета во рту. (вО РТу) Во всём нужна мера. (вО ВСём) http://www.alphadictionary.com/rusgrammar/index.html?

в тундре, в лесу, в парке, в магазине, в голове, в мозгах, в доме, в ауле, в ботинке, в шалаше, на чердаке, в кастрюле, в тебе, в теме, в книге, в волосах, в прозе, в стихах, в страхе, в стае, в тени, в школе, в реке, в чемодане, в доме, в пруду, в Лондоне во сне, во льду, во рту, во мне, во тьме, во мгле, во мраке, во Львове, во встрече, во времени, во внутренностях I have no idea when 'в' is used and when 'во'. Though 'в' is more likely to appear anywhere. Probably "во" is used when placed before 'в' in the next word and in words that are monosyllabic in prepositional case.

Prepositions are very difficult to translate and many people get confused when you start learning another language trying to figure out those little words - which word should you use. The best way to learn those little prepositions is just to read and to listen more and more, and eventually, you will know them without even having to study them.