For the non-science minded then there is some confusion between elemental liquid nitrogen (info) and the molecule nitrous oxide (info) – the confusion is enough to cause injury through misuse (here) –
but firstly the similarities: both are naturally occurring gas and contain nitrogen atoms. Neither are very soluble in water. Nitrous oxide is slightly soluble in fats when under pressure.
Liquid nitrogen is used because it is very, very, very cold – that’s why it can make instant ice cream. It can also be used as a gas for pushing beer through pipes – but without making it fizzy (because it doesn’t dissolve)
Nitrous oxide, is used because it will selectively dissolve into fatty substances – so when a substance such as cream is pressurized with nitrous oxide it will dissolve into the fat – but not the water, then when the pressure is released you get bubbles forming in the fat – hence the whipping of the cream but not the water – so it doesn’t get all fizzy – like it would with a gas such as carbon dioxide.
When you make nitro ice cream then you don’t get “fizzy” ice cream for two reasons, firstly the nitrogen is not added under pressure ( there is no equivalent to the whipped cream dispenser used with nitrous oxide) and the second is because nitrogen is so inert that is really has no interest in doing anything beyond simply turning back into a gas and then floating off in the atmosphere to join its friends..