Both wrong. WINE is "WINE Is Not an Emulator" It is more of a compatibility environment. It provides the same functional API that Windows does and runs the executables natively. The main problem it has is that it isn't a perfect API nor does it have all the functions that Windows does so some applications don't run quite right. However, it is almost there.
VMWare is a virtual machine. It provides all the functionality of the seperate PC running under its host OS. It runs the applications on the native processor.
For an EMULATOR you'd want to check out BOCHS or VirtualPC for Mac.
One big difference that WINE differs from the others is that the others require you install Windows on a virtualized environment. WINE doesn't require a copy of Windows to use it.
Can you analogize? I am having some difficulty understanding exactly the differences. I'm trying to learn, though.
Ack I called VMWare an emulator... dang I see where I goofed... Nice catch..