Please explain the difference between an insulated and an isolated ground line. Are they not one and the same?

An insulated ground is just that, an insulated (green) ground wire.

An isolated ground wire is a ground wire that runs all the way back to the service ground, without being connected to raceways or boxes along the way. Occasionally used with sensitive electronic equipment to provide a "clean ground" in electrically noisy environments.

The code requires an insulated ground in each receptacle found in a patient care area. If I connect this to a dedicated ground from the panel, then its basically an isolated ground is it not? I don't see the wisdom in simply tying off the insulated ground from the receptacle to the nearest j-box ground. What would be the point of having an insulated ground then?

Actually, it is not. When you install an isolated ground conductor and utilize an IG receptacle, the ground prong does not connect to the metalic strap of the receptacle. So, when using an IG receptacle, you need 2 grounds: an insulated green equipment grounding conductor to connect the raceway / outlet box / metalic strap of the receptacle, and a separate isolated ground conductor connected only to the receptacle's ground connector (and run back to the main as NJWirenut said).

The idea is to separate the receptacle's ground connection from the 'dirty' equipment ground.

Hope that helps some.
Radar

Sandro

Section 24 of your code book covers this.
If you go to "Appendix B" and look up the rule number,it explains the intent of the rule.