Warrior Tanking
Warriors use single target threat generation abilities like Shield Bash, Devastate, and Revenge. With them, they can maintain extremely high TPS (threat per second) on a single mob. They also have abilities like cleave (2 target attack), Thunder Clap and Demoralizing Shout which are somewhat effective on multiple mobs. Their single target TPS is high enough to hold aggro against well-played high dps classes with equal quality gear.
However, what Warriors suck at is tanking more than 1-2 mobs. To tank several mobs their TPS must be split between them, so if a Warrior is capable of putting out 700tps to one mob, they'll have to split it to say: 500 %26amp; 200tps for 2 mobs. This makes tanking multiple mobs difficult and can truly test your ability to switch targets and use the appropriate abilities at the appropriate time.
Paladin Tanking
Paladins use an ability called Righteous Fury, which causes their holy damage to generate 60% extra threat. This means that most of a Paladins threat should come from Holy damage. They have several reactive holy spells which generate threat when the Paladin is hit. Retribution Aura, Blessing of Sanctuary, Holy Shield and Seals all have the potential to generate passive threat. Consecration is an area of effect Holy spell which adds to this passive threat. With spell bonuses and Righteous Fury, Paladins are a multi-mob threat generating machine.
However, Paladins sorta suck at tanking single mobs. Their potential TPS can be pretty low and they may find themselves having trouble holding aggro against high DPS party members. For example, a Paladin will only be able to put out a portion of a Warrior's TPS during long tank fights like the Curator in Karazhan.
Finally, since Paladins are typically tanking 2 or more mobs, their damage output is significantly higher than a Warrior who is tanking a single mob. In a 5-man instance a Warrior might be lucky to break 200dps where a Paladin can exceed 300dps without much effort. So now you might wonder, why would you want a Warrior tank? The answer is that there are some encounters that are geared towards Warrior tanking and also some group compositions that do high burst damage where a Paladin might have a hard time holding aggro.
A big change from original World of Warcraft to The Burning Crusade was an addition of multiple elite mob encounters. This made Paladins more effective for most situations between 60 and 70. Fortunately, Warriors will be receiving some new Protection abilities such as Shockwave, which should help them during the Wrath of the Lich King.