I have an LG 7000btu portable a/c [LP0711WNR] unit that I would like to use in a basement area solely as a dehumidifier. Do I need to vent the exhaust to the outside or can it just exhaust back into the basement? Specifically, does the water vapor condense inside the unit and go out the drain or is it turned into vapor and blown out the exhaust making outside exhaust necessary? Thank you.
In theory, this will work just fine if you provide a way to collect the condensed water from the evaporator (the finned heat exchanger where the working fluid is evaporated to take heat from the "indoor" air). However, note that the more efficient window units take this water and spray it against the condenser (the other finned heat exchanger where the working fluid is condensed to pump heat into the "outdoor" air). This increases efficiency by making it easier for the condenser to transfer heat to the outdoor air (see heat of evaporation).
This is great for an air conditioner, but if you try to use such a unit as a stand-alone dehumidifier, with both intake and exhaust in the same room, then you'll just be pumping heat AND humidity from one side to the other, with no net gain (except for heating your basement). It's possible that you could intercept this transfer of water from the "indoor" to the "outdoor" side, but that would completely depend on the design of the air conditioner.
We have a portable dehumidifier that is nothing but a small air conditioner made more convenient with wheels and a drain port for attaching a hose and an included bucket if you don't attach a hose. The exhaust blows into the basement and, since the basement is far cooler than the rest of the house and we don't do anything down there, any added heat never bothers us, nor is it noticeable.
It also has a humidity detector and turns itself on and off based on that, not temperature. This will be your only real issue with using an AC unit.
Other than that, there is no difference.