We had a very good experience with a hospice when my father died. It was a beautiful place, very quiet and nurturing for the families with great care for the patients. This was a good situation for us, because my dad's cancer had spread so much that they discharged him from the hospital and we were just waiting for the end and trying to keep him out of pain.
My mom died in a hospital, which is a much less friendly situation for families. The circumstances were different though, because she died within 48 hours of them stopping chemotherapy. So we didn't really have time to choose our situation. If you have a choice , I would say a hospital is not the place to be, because they are so busy fighting against the inevitable, they don't provide the families with much support, either practical or emotional.
Here were the specific differences we experienced:
Hospice staff were always kind and attentive. They would take time to answer questions, talk with us, talk with my dad, and even inquire how we were doing. There were many kind nurses at the hospital, but they are all short on time and over-worked. They don't have time to talk much or help you figure out what needs to be done in terms of preparing for your love-one's death.
The hospice had a kitchenette with snack food, cereal and milk, coffee, etc. It was a 15 second walk from my dad's room. This allowed us to spend more time with him.
The hospital is noisy and busy - nobody gets much rest there. Nurses and RT's were constantly coming in day or night. The oxygen was very noisy as well. None of that in the hospice.
In the hospice there were young volunteers who would come in and sit with my dad, or sit and talk to us. One of them was there when my dad died and sat with my brother for a long time after he passed, comforting him and offering to help with anything that needed to be done.
The hospice was set up for kids to visit with their parents. My son was 5 at the time and didn't like being in the room with my dad - I think it scared him. In the center of the building, not too far from any of the patient rooms was a room with couches, tables, a big tv, toys and lots of games. He could sit out there while we spent time with my dad.