Practically everyone who grows plants, uses some sort of sphagnum moss. Sphagnum moss is found in most commercially available potting soils and garden soils, in bales labeled "Sphagnum Peat Moss," in 2 cf. bags of "Milled Sphagnum Moss," in moss-lined baskets, and in small bags of "Long-fibered Sphagnum Moss." But what are you really buying? Are these products basically the same thing? To understand the terminology, one must understand the source of horticultural moss.
Sphagnum moss and peat moss begin life the same way, from the same plant. Sphagnum moss grows on the surface of the soil, generally where the climate is mild, humid, gets plenty of rain, and perhaps somewhat shaded. I say "perhaps somewhat shaded" because there are varieties of sphagnum moss that flourish in full sun. Sphagnum moss grows in abundance in parts of Canada, Peru, New Zealand, Ireland, and Scotland. It grows all over the world, but these areas are where most of our commercially available moss comes from. Sphagnum moss is a living plant when harvested, but when we purchase it, it has been thoroughly dried. Basically, there are two forms of the sphagnum moss when sold commercially, long-fibered moss and milled moss. They are the same moss, but the long-fibered is left in its natural form and the milled is moss that has been finely chopped. Generally, the pH of sphagnum moss is neutral. It is soft, pliable, and very water-retentive. It is used to line baskets, as a seed-starter medium, as a medium that most big-box store Phalaenopsis orchids are growing in, and as an amendment in potting soils. Good quality sphagnum moss will be pure moss, without any other plant material incorporated.
Peat moss, often labeled "Sphagnum Peat Moss," is quite different, though. It begins its life as sphagnum moss. Over time the sphagnum moss dies and is over-grown by new sphagnum moss. This is repeated over and over, and after hundreds or even thousands of years these many layers of dead sphagnum moss form a bog. This layer of dead, compacted moss is now called peat moss. Peat moss is saturated with water, and can be up to 70% water. Water is a necessary element for a bog to form. Peat moss is not pure moss, though. It will be a mixture of many plant varieties that died along with the moss and may have twigs and dead insects as well. Whereas sphagnum moss has a neutral pH, peat moss is very acidic and is high in tannins. Peat moss is sold in compressed bales and, like milled sphagnum moss, it is used in potting and garden soils. Peat is a less expensive amendment in potting and garden soils. Peat is a great medium for growing acid-loving plants, and my blueberry bushes are growing in pure peat. When peat is used as a soil amendment for plants that don't grow well in acid conditions, the pH will have to be altered, perhaps by the addition of lime. In some areas of the world, such as Ireland and Scotland, peat is excavated, cut into "bricks," and used for heating and cooking.
Sphagnum moss in Ireland
Peat "bricks" in Ireland