Hola John, ¡buena pregunta! We use "este" to say "this" followed by a masculine singular noun, e.g´"Este hombre es muy alto" (This man is very tall). However "esto" is not followed by a noun, it refers to an "idea" or "situation" which has been mentioned before or it is obvious by the context. One simple sentence with "Esto" would be "Esto es terrible" (="This is terrible"). Imagine for example that you are stuck in traffic, or are witnessing something awful, then "Esto" would be referring to that specific situation. I hope it clarified your doubt.

A separate lesson about "Esto" will be soon released, where it is tested separately because we understand it can be a bit confusing.

Hola John - In other words, este is a demonstrative adjective (modifies a noun) while esto is a demonstrative pronoun (replaces a noun). :-)

Hola John,

Here is the lesson explaining "esto". Sorry it took so long. 

Saludos,

Inma