How does ultrasound differentiate between testiclular cyst and cancer?

Different: Testicular cancer, while it can have cystic parts, is a predominately solid mass in the testicle. Most simple cysts that are seen on scrotal ultrasound are around, not in, the testicle. There is a cyst of the lining of the testicle, the tunica, that is sometimes seen and it is benign.

See answer: A cyst is a benign well defined fluid collection sharply demarcated with good sound transmission and no vascular flow. Testicular malignancies are usually solid, often irregular with vascular flow and possibly calcifications. Discuss with your dr or radiologist- they look quite different.