This is a great question and the answer is surprising to most people. A foreclosure will lower your credit score anywhere from 250 to over 300 points! Typically the foreclosure will affect your score for well over 3 years.
A short sale however will only show late mortgage payments after the sale. The mortgage is normally reported as "paid as agreed", "paid as negotiated", or "settled". This can lower your score as little as 50 points if all other bills are being paid. A short sale's effect can be as brief as 12 to 18 months.
Do you have specific questions about short sales? Please contact me... I would welcome the opportunity to speak with you!