If you confuse two things, you are not correctly identifying them. If you confuse heartburn with a heart attack, you might end up at the emergency room instead of in the antacid aisle of the drugstore.
To confuse can also mean to bewilder. If you tell a teacher that she's confusing you, you probably mean that she's being more complex than you can handle. A lot of people get confused by the differences among "their," "they're," and "there." To confuse the situation even further, there's "theirs" and "there's."