While the label of “Egyptian” may sound exotic to some Americans who are searching for high end cotton sheets, the country simply appearing on a label can be very misleading in terms of quality. A statement of the country of origin isn't a reliable indicator of quality at all. But, there is a difference between some Egyptian and American cottons.
What you're looking for in a high end cotton is a long staple length. Most products that are truly high quality will have the fact that they are made of ELS cotton on the label. The country of origin of the cotton may be listed, but the fact that it is “extra long staple” cotton will be the most important thing between Egyptian and American cotton.
The reason long staple cottons are higher quality is due to the fact that it takes more short staple fibers woven together to give the yarn any real strength. This is where you end up with insane thread counts like 1200 or even 1800; these products are actually made of lesser quality cotton, but more of it has been woven together to get the same feel. Unfortunately, these products do not have near the same durability that ELS cotton products do. They will not stand the test of time and will tear and pill much sooner than their higher quality counterparts will.
Thread count is a negative indicator of quality; the higher it is, generally the lower quality cotton it's made of. 300 thread count ELS cotton sheets are superior to 800 thread count upland cotton sheets any day of the week.