Digital skills would focus on which tool to use (e.g., Twitter) and how to use it (e.g., how to tweet, retweet, use TweetDeck), while digital literacy would include in-depth questions
I define digital skills as knowing how to work a kind of technology, whereas digital literacy is the knowledge of how a kind of technology works. One is not better than the other, however. If someone or some group wants to accomplish a goal using technology, they're going to need both literacy and skill. Having little skill with a lot of literacy would be like knowing how a car engine works on a technical scale, but not being able to fix it if your car broke down. Having little literacy with a lot of skill would be like having a bad teacher for a subject. They understand the material, perhaps even demonstrate mastery, but they cannot teach their knowledge to others because of the communication gap.