BAITED, BATED

Baited usually refers to traps or snares. When the reference is to someone who is hardly daring to breathe, the correct word is always bated:

"She watched with bated breath."

I've yet to read that someone "bated a trap" instead of baiting it, but there's always a first time.

BARE, BEAR

Bare means naked; bear (apart from being a large animal) means to carry.

BESIDE, BESIDES

Beside means by the side of; besides means in addition to.

BIANNUAL, BIENNIAL

These two are really tricky! Biannual means happening twice a year; biennial means every two years.

BLONDE, BLOND

Because these are borrowed from French there is a feminine and masculine form. Blonde is feminine and blond is masculine.

BOARD, BORED

Board is a long sheet of wood, also a group of people as in "Board of Directors", and as a verb means to go onto a ship, plane or other form of public transport; bored means not interested.

BORN, BORNE

Born is always the beginning of life, borne means carried.

"I was born in the middle of a particularly severe winter."

"The logs were borne down the river to the mill."

BRAISE, BRAZE

Braise means to cook slowly in liquid (usually meat); braze most commonly means to solder with an alloy of copper and zinc.

BRAKE, BREAK

Brake means to stop; break means to smash.

BY, BUY, BYE

By is a preposition meaning next to; buy means purchase; bye means farewell or good-bye.

CAPITAL, CAPITOL

Capital means the seat of government; capitol is the building where government meets.

CONTINUAL, CONTINUOUS

Continual means something that happens frequently, with breaks between the occurrences. Continuous means something that happens without stopping!

"Continual interruptions distract me from writing."

"The continuous noise of the motor mower distracts me from writing."

CO-OPERATION, CORPORATION

Co-operation (usually spelt without the hyphen in US English) means working together; corporation is a business organisation.

CORRESPONDENCE, CORRESPONDENTS

Correspondence is written communication; correspondents are those who write it.

CREDIBLE, CREDITABLE

Credible means believable; creditable means praiseworthy or deserving credit.

CURB, KERB

Curb means to control, as in "curb your temper"; kerb is the edge of a footpath or sidewalk.

DESERT, DESSERT

Desert means to abandon (and can also be a noun, meaning a wasteland); dessert is the sweet course of a meal.

DEVICE, DEVISE

Device is a noun, meaning a gadget or (particularly in writing terms) an invention; devise is a verb, meaning to invent or plot.

DISCREET, DISCRETE

Discreet means respectful, prudent; discrete means separate or detached from others.

DRAFT, DRAUGHT

Draft refers to the the first writing of your novel or story (or any other document). You can also be drafted (enlisted or recruited) into the army, navy, etc.

Draught is an air movement, a drink (as in "draught of ale") or refers to a horse (or other animal) used for pulling ploughs, etc (e.g., "draught horse").