The degree of difference between the Serbian dialects and Croatian dialects is equal to the degree of difference between American English and British English. The Serbian and Croatian dialects really form one language, Serbo-Croat.
I would like to point out that Shallot has given some incorrect data in regards to the Serbian dialects of Serbo-Croatian, which is why I am writing this node.
In regards to Serbian: Serbian uses both ekavian and ijekavian/jekavian, and it also uses both Cyrillic and Latin alphabets. In Serbia, ekavian is mainly used except for the Rashka/Sandzhak region, where ijekavian/jekavian is used. In Montenegro, ijekavian/jekavian is used, and may I inform people that Serbian is spoken by 65% of the population (Montenegro has a population of over 600,000 people). In Bosnia and Herzegovina, ijekavian/jekavian is used by the Serbs, the Muslims, and the Croats. Among Krajina Serbs (who are generally of Montenegrin origin), ijekavian/jekavian is generally used, with the exception being Krajina Serbs living in the Baranja region and south of it, who use ekavian like the Croats over there.
Shallot seems quick to suggest that “numerous” Croats were “harassed over the past decades” for the way they spoke. Well, that’s news to me! Also, he doesn't want people to insist that the differences between Serbian and Croatian are negligible. I'll let you work out why!