Hi,
The main difference will be the quality of the tone woods used, which I`m assuming being a Stratocaster type guitar, will have an Alder body and a Maple neck and perhaps a Rosewood or even a Maple finger board. The more expensive versions will have better tone woods, and better construction depending on where they are made.
Budget guitars are now mainly built in the far east in countries such as China, Korea, Mexico (Fender have a factory down there too, and they make nice Strats if you cant afford a Fender USA model), also some companies have factories in Indonesia.
The Quality of these instruments which most importantly includes the overall playability of the guitar will depend on the model and range of the instrument.
This also includes the electronics including the quality of the pick ups, and which pick ups (you can easily get your local music shop/tech to fit some better pick ups, or install better parts on to it) and of course the hardware such as the bridge and the tuning heads etc !!!.
So there will be some difference between a Fender and a Squier, but Squiers and the Fender Duluxes are still excellent entry and mid level instruments and can be easily modified into something really special if you cant afford a Fender USA !!!.
So I say go with the Fender , making sure its suited towards what sound and music you will play, so I`d recommend a Strat with Humbucking pick ups (either HH which is two humbuckers, or HSS which is a Humbucker and two single coil pick ups, so you can have the growl of a humbucker for rocking out, and the clarity of the single coils for the classic strat sounds for clean sounds) !!!.
Also make sure the music shop has the instruments properly set up, and have decent amps for you to hear it through (don't be afraid to ask them if they have set up the instruments and if not can they set up the one you want to buy for you (that way you will get to know what guitar is really like and if it is right for you) !!!.
Hope this helps, feel free to PM me if you have any more questions !!!.
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For in each delve and greenwood,
far wiser creatures play,
and in their veins and sinews,
live the gods of yesterday.
Be excellent to one another !!!.