Cooking sherry and sherry vinegar, though both derived from the same fortified wine, are different products. While cooking sherry is a wine comparable to Madeira or Marsala, sherry vinegar is a fermented wine, or vinegar, offering the same characteristic acidic or soured note as other vinegars.
Cooking sherry is used to create a myriad of dishes and can easily be substituted for another dry red or white wine. Sherry vinegar is most similar to balsamic vinegar and is used to dress salads and add flavor to sauces. Though they are quite different, a dry white or red wine, as well as Madeira or Port, can also be substituted for sherry vinegar in a recipe.