"Tactless. Adj. Lacking or showing a lack of what is fitting and considerate in dealing with others; revealing lack of perceptiveness or judgment or finesse."
"Frank. Adj. Honest and straightforward in speech or attitude; outspoken or blunt; open and avowed; undisguised."
The way I see it is like this: a frank individual, such as myself, will freely say, "That dress looks awful on you", before the person buys it. A tactless person will go up to someone at a party and say, "Wow! That dress looks awful on you!", not caring how many people overhear.
The difference? I am honest and as they say, the truth hurts. However, I know when it is appropriate to display such honesty and when it isn't. When circumstances arise in which it would be wholly inappropriate to offer unbridled criticism, I tame myself. I realize that in such cases it would be far meaner to be honest than to lie. On the other hand, a tactless person is incapable of making such a distinction. They are unable to judge a situation and determine whether it is best to remain silent or to offer their opinion and because of that, they are seen as offensive and rude. In short, a tactless person is blunt with no regard to appropriateness.
Being frank is telling the truth as much as you can without hurting somebody's feelings, being tactless is telling the truth with complete disregard for somebody's feelings.
SCENARIO: Your friend is in a crowded dressing room at a department store trying on an outfit for an upcoming date. She comes out of the dressing room in a dress that highlights her backfat, rolls and love handles and the color of the dress makes her look sallow and sickly.
FRANK: That dress isn't very flattering. Try the other one.
TACTLESS: That dress makes you look fat as hell and the color makes you look like you are about to die of dysentery. Take that ugly sh*t off before someone else sees you!
I have met a lot of people who are tactless but think that they are frank or "honest/blunt" as they put it. I think it's always good to be honest but that doesn't mean you should forget basic consideration and empathy for others either.