What exactly is the difference between monism and monotheism?

Monism and monotheism are not the same thing, though some
people are both monist and monotheist at the same
time.

Monotheism is the simpler concept.  Monotheism is the
idea that there is only one god.

Monism is more
complicated.  It is the idea that all things are truly part of one overarching whole. 
There are not truly many things, all is one.

It is possible
to interpret monism and monotheism to be compatible.  In such a view, God and the
universe are the same thing.  The whole universe comes from God and is part of God.  So
long as one believes that there is only one god, this type of monism would be
monotheistic.

Monism, then, is one way to be monotheistic. 
However, many monotheists, as seen in the newadvent.org link below, would see monism as
a heretical form of monotheism.