Hardwood flooring is made of 100% wood. Laminate flooring is made of fiberboard with a fake-wood finish. While hardwood flooring is more authentic and has a longer life, laminate flooring is cheaper and better-suited for environments with a lot of moisture, such as a kitchen.
Hardwood floor is typically made from pure wood. The price depends upon how exotic the tree is. For example, the most expensive hardwood comes from mahogany, wenge, and teak. Solid Hardwood is 3/4" thick of solid wood, whereas an Engineered Hardwood has 3-7 layers of wood to provide added strength and protection from moisture.
Laminate floor is made from high-density fiberboard, a wood product that is engineered using a variety of wood fibers and belongs to the cardboard family. The fiberboard is sandwiched between melamine laminate backing, high-quality photographic paper with an image of wood, and a melamine laminate top. Some new varieties replace the photographic paper with a thin slice of real wood veneer.
edit Durability and Upkeep
Hardwood floors are more susceptible to scratching and can be damaged by excess moisture. They are more likely to show wear and, if stained, can change color over time. Hardwood floors are less "shiny" and do not stain or smudge easily.
Laminate flooring is more durable and resists scratches, moisture and wear and tear. It stains and gets smudges quite easily but is easier to clean and does not require wax or polish. It does not yellow in the sunlight, but requires special padding underneath to reduce its potential for noise.
The price of hardwood depends on the quality of the wood used. Basic hardwood floor costs between $10 and $13 per square foot.
Laminate flooring costs between $7 and $11 per square foot.
Imperfections in hardwood floor can be repaired by sanding and refinishing.
Laminate floor cannot be easily repaired. If the flooring comes in individual pieces that are snapped together, damaged pieces may be replaced, but the replacement pieces may not match exactly.
edit Life Expectancy
Hardwood floors last for up to 75 years. Laminate floors last for up to 20 years.
edit Video explaining the differences
Here's a good video that helps explain the differences between solid hardwood and engineered hardwood and also contrasts them with laminate flooring: