What is the difference between simulator & emulator?

Software and hardware. An emulator is a software conversion application, a simulator usually is a combination of hardware and software used to emulate a mechanical device for training purposes etc.

A simulator is a piece of software or hardware that creates a model or likeness of a situation or system (for example a flight simulator allows you to experience what it is like to fly an aircraft, a driving simulator to experience driving etc.)

An emulator (with regards to computers) is a piece of software that enables one computer system to run programs that are written for another compter system. For example there is a Comodore 64 emulator for the iPhone which allow you to run games written for the C64 on the iphone.

A simulator is, as Lightlyseared said above, a system (software, hardware, or both) that simulates another system. The word simulation often implies non-equality. When simulating a system, such as an aircraft, there are usually simplifying assumptions that are necessary to achieve a tractable solution. Usually a simulation involves solving equations that represent things in the physical world and using these solutions to find out how something might function in the real world.

An emulator is usually used to describe a recreation of a hardware system in software. Basically, again as Lightlyseared said, it is a program that allows you to run certain programs that were designed for other systems. This is usually done by importing the original system’s BIOS or other embedded software and creating a software network to handle the input and output operations to the original embedded software. The term emulate usually implies approaching equality or actual equality. Emulators usually have a very strict goal to achieve equality with the original hardware.

In short, simulators try to determine what would happen to something given certain inputs and propagated through time, emulators try to give an output indistinguishable from the system it’s trying to emulate. I think you can see the differences well when you see their goals compared.

Simulation is when you are replicating, by the means of software, the general behaviour of a system starting from a conceptual model.
Emulation is when you are replicating, in a different system, how the original system actually internally works considering each function and their relations.