Improvisation, by definition, is "on the spot" composition.
In that sense, the only difference between the two is that the improvising musicians dont have an eraser.
About metheny, I wouldn't restrict the word "jazz" as describing only bebop/swing/whatever type of jazz you familier with. As said above, Pat Metheny's group plays composed music with improvised solos. In my book it's still considered 'jazz', as the solos are still the dominant factor most of the time