It's kinda complicated, but to put it in easy tems...the Champions League is for the excellent most brilliant teams where the UEFA Cup is for the good teams, not necessarily great teams. (ex:Like having Real Madrid and Barcelona in the Champions League and Valencia and Villareal in the UEFA Cup)

Firstly the big european footballing nations (england, spain, italy, germany, holland, france) give out maybe 3 or 4 champions leauge spots for teams finishing 1st 2nd 3rd 4th in the leauge. Teams finishing in the 3rd of 4th will have to go into a qualifying rounds. Lower footballing nations (eg switzerland, russia) can only offer maybe 1 or 2 and some (estonia etc) can only offer a number of qualifying rounds for their top clubs - which they rarely get past. The Champions league has two group stages, 2 teams are knocked out each time and then 3 rounds of knockouts. In England Teams finishing 5th and 6th (and sometimes 4th depending on the previous teams success in the champions league) go into the uefa cup. Other places can be won by winning the domestic cups - FA, League etc. This is similar for other european countries - lower countries award this too their top teams. However teams from higher footballing nations enter at later rounds and teams that drop out of the Champions leauge before the knockout stages are also automatically put into the UEFA cups later stages. Alot of the time, teams that are knocked out of the Champions Leauge end up winning the UEFA cup. Unfair? UEFA cup is two legs for each team pairing and a straight knockout. PHEW!

Qualification for playing CHAMPIONS LEAGUE Qualification for the competition is decided by competitor teams placing in their domestic league championship, on a quota system, with countries with stronger domestic league competition allocated more teams. Clubs that play in stronger domestic leagues also enter at later stages of the competition. For example, the three strongest domestic leagues, as rated by UEFA, place their champions and runners-up directly into the group phase, and their third-and fourth-place teams enter at the third qualifying round. Domestic league champions from countries with poor UEFA ratings receive no place in the Champions League, and instead receive entry to the UEFA Cup.

The Champions League and UEFA Cup differ both in standing and structure. The Champions League is widely regarded as the most prestigious club tournament in world football (even though only teams from Europe can compete), and its participants are generally the cream of the continent. Teams can only qualify to play in the Champions League via their domestic league position (unless they are the current holders). Different countries' leagues are allocated a certain number of places in the competition according to co-efficients calculated by UEFA. For instance, large nations like England, Italy and Spain receive 4 places in the competition, while smaller nations will receive fewer. Sixteen top teams are admitted straight to the group phase of the competition, while the remainder enter a qualification tournament to fill the other 16 spaces. The thirty-two teams are divided into eight groups of four, both teams playing each other twice, and the top two teams in each group qualify for the knock-out stages. Two-legged ties are played until the final two remaining sides contest a single match to determine who will be crowned Champions of Europe. The UEFA Cup is somewhat of an understudy to the Champions League. Places can be gained in the competition via domestic league positions and also by winning domestic cup competitions (or finishing runners-up in some cases). The competition used to take the form of a straight knock-out but now also has a short group phase. In recent years, the popularity and standing of the UEFA Cup has waned due to the success of the Champions League, and the fact that the UEFA Cup itself is almost completely devoid of star names of the European stage.

the most significant difference is the Money award .