They're actually quite different. Different layout (reddit's is denser); different initial focus (Digg was initially about technology, reddit general news); very different frontpage ranking algorithm (why Digg has problems with censorship and reddit doesn't); and different comment threads (until Digg copied reddit yesterday).
The reason they're so different is that they have different origins. Digg started as Slashdot with voting instead of editors, and reddit started as Del.icio.us with voting instead of saving.
What I think is funny is that digg recently redesigned their comments (the most distinguished feature of reddit) to try to immitate reddit's, but missed the most critical aspect -- the ordering.
Digg still orders comments chronologically and that sucks. I'd equate this with google not paying attention to ordering of results! Creating a threaded comment system without the ordering is so mind numbingly easy and digg decided to take the easy path without paying attention to the details that count.
I was tempted to post this where the creators of digg can see it, but I don't really want them to realize their error:)
