These two conditions — scalp psoriasis and seborrheic dermatitis — share a lot of the same characteristics and are thus difficult to differentiate. They both can cause unquenchable itchiness as well as flakiness of the skin.  They both can irritate the skin as well, causing it to become red and sore.   They also both can be treated using similar methods, including sunlight, coal tar, salicylic acid and hydrocortisone (for treating itchiness).

The surest way to tell the difference between these two diseases is to get a biopsy done via a medial lab.

One of the moist easily observed differences in the two disease is the degree of oiliness present on the scalp.  Seborrheic dermatitis is characterized by excessive oil production by the skin why psoriasis tends to result in extremely dry skin.  Appropriately, seborrhea by itself is a condition whereby the skin produces to much oiliness.   Thus, while moisturizers can help ease the itch of psoriasis, they can actually make seborrheic dermatitis worse.