Eid Milad-un-Nabi is the anniversary of the birth (and the death) of the Prophet Muhammad (peace be upon him). A large number of Muslims do not believe in celebrating birthdays of death anniversaries because there is no historical evidence that such was the practice of the Holy Prophet. However, similarly large number of Muslims do commemorate the birth anniversary of the Holy Prophet on 12 Rabi-ul-Awwal of the Islamic lunar calendar year. For Muslims, this date marks the most important event in the history of the mankind because the Holy Prophet Muhammad is regarded as the Chief of the Prophets, to whom the Holy Quran was revealed.
The extent of the festivities, on this occasion, is restricted because of the fact that the same marks the death anniversary of the Holy Prophet (pbuh) as well. It does seem to me that in Pakistan it is more a birth anniversary celebration, as the festivities and decorations are lavish.