How does the difference between legalization and decriminalization affect the prostitutes themselves?

The legalization of prostitution would create a recognized
profession which would then be regulated and taxed the way that other potentially
unhealthy professions are regulated and taxed.  Those currently engaged in prostitution
have their own level of regulation in place, but because it is not legally enforced and
because those involved are essentially performing illegal, cash-based services, the
current administration of this profession is based upon the individual power of
criminals. 

Example:  Bonnie, the corner prostitute works
for Albert, the pimp.  In exchange for an outrageous percentage of Bonnie's earnings,
Albert provides her with protection from those who might enjoy her services and then
decide not to pay her.  Albert is not necessarily a very nice guy, he is a criminal and
because he imposes his own "regulation" on his business and his employees, he uses
physical violence to prevent Bonnie from embezzling money from the "business".  Bonnie
receives cash for performing illegal activity; as such she is not paying any taxes.  As
far as the IRS is concerned, she has no source of income.  Bonnie also has none of the
benefits that traditionally accompany employment.  She is not receiving any credit
toward Social Security and if she loses her employment she will not be able to receive
unemployment compensation.  Finally, Joe, the average joe who hires Bonnie, runs a
substantially increased risk of contracting diseases because, although some of Bonnie's
co-workers are very health conscious and get regular check-ups, Bonnie herself just
doesn’t care that much, and there is no government regulation making it a condition of
her employment that she go to the doctor regularly.

Ok, now
legalize prostitution and consider the consequences. 

Albert is out of a job.  Why?  Bonnie is now able to go to
the police if her clients threaten or abuse her.  She can sue them for breach of
contract if they don't pay.  Therefore Bonnie no longer needs Albert and she can keep
the percentage he would take from her.  If she WANTS Albert's services, he will have to
act as a sort of manager or agent, and he certainly won't be using physical violence
against her.  Bonnie is also now going to pay income taxes, she will be eligible for
unemployment compensation, she will have wages that will build up eligibility for Social
Security later in life.  And the government will regulate her activities VERY CLOSELY. 
She will now be forced to have regular doctors visits and STD screenings as part of her
profession.  As a happy result, Joe, the average joe, will have a markedly lower risk of
being exposed to health threats (except, probably, from his
wife.)