The main difference lies in the distillation process.
Vodka is "a neutral spirit so distilled, or so treated after distillation with charcoal or other materials as to be without distinctive character, aroma, taste or colour." (US-Regulation, but also a good general description).
New make spirit flowing straight from the spirit still in whisky making, however, is full of flavours and taste, as it has not been purified to such an extent that all flavour-giving compounds have been removed.
Source: "Alcohol Textbook", a "reference for the beverage, fuel and industrial alcohol industries", now in its 3rd edition, published by Nottingham U P (ISBN 1-897676-735).
In there, you can find an article on "Production of Neutral Spirits and Preparation of Gin and Vodka."
[This message has been edited by Ileach (edited 06 June 2002).]