To pale in comparison is to look weak, small, meager, or inferior compared to something else. Pale here takes the little-used sense to become smaller. It’s the same pale used in the common phrase (less common in the U.S.) pale into insignificance, whose meaning is obvious.
Unlike pale, which has many definitions, pail is mostly confined to one primary sense—i.e., a bucket. The word doesn’t function as a verb, so there is no context in which pail in comparison might make sense. This misspelling is fairly common, though. On the web, it appears about once for every 25 instances of pale in comparison.
Of course, while Gears is certainly a hit, its sales numbers pale in comparison to the older and more storied Halofranchise. [The Escapist]
The wealth of these figures from history pales in comparison with the strutting financiers of Wall Street, the geeky billionaires of Silicon Valley and the grisly oligarchs who plundered Russia. [Guardian]
While the tsunami’s impact on California pales in comparison to the destruction caused in Japan and other areas of the Pacific, the event tested emergency responders’ ability to rapidly communicate and coordinate a response. [PLoS Currents]
The woes of a certain segment of downtown Manhattan pale in comparison to those of many other victims of the storm. [New York Times]
In the Tuscan villages, partisans’ violence certainly paled in comparison to Nazi violence. [Memory and World War II, Francesca Cappelletto]