The difference is significant and when confused can lead to hilarious results -- "I am very discrete" suggests "I am quite alienated" as opposed to "I can be trusted with secrets".
"Discreet situations" is suggestive of a True Confessions situation as opposed to isolated incidents!!!!
discreet adj. Showing discernment or judgement in the guidance of one’s own speech and action; judicious, prudent, circumspect, cautious; often esp. that can be silent when speech would be inconvenient.
discrete adj. Separate, detached from others, individually distinct. Opposed to continuous.