Firstly, the appearance. Llamas are typically bigger than alpacas. The alpaca has pointier and tinier ears than a llama, which has much longer ears. There is of course a difference in the body shape of alpacas and llamas, what with alpacas having rounded backs and llamas having flatter backs.
Secondly is their fiber. Alpaca fiber is usually very soft and ample. The fiber can either be huacaya, which is fluffy and sheep-like on the alpaca, or suri, which looks much more loose and stringy. Llamas have much more of a variety of fibers, which can range from light to heavy, silky to suri, or high to low quality fiber.
Alpacas and llamas are used for very different things. Llamas tend to have more use. Training a llama is easy, and once trained it can be used for guarding livestock and companionship for other herding animals. They can also be trained to do obstacle courses. Alpacas, however, are usually only used for their fiber and for showing. They are much harder to train, and much more shy.
As you see, there is a great difference when it comes to alpacas and llamas. Although they are both part of the camelid family, they are not the same species.
