AppleScript vs. Automator

Automator is a set of guidelines for how your application exposes its scriptable functions so that they can be detected by the automator and used with the drag-and-drop script maker thing.

This is from the WWDC session description for writing scriptable applications:

The easiest way for your application to work with Automator is for it to be scriptable. Most of the effort required involves defining your application’s dictionary, which contains the various commands and classes accessible to AppleScript. Learn how to design a dictionary for a sample application, how to define a well-designed scripting interface for your own application, and how to specify the dictionary in the new sdef format.

Think of ‘Automator’ as the Mac GUI equivalent of UNIX command piping. It also allows one to save an Automator action as a compiled script which is available as a Finder contextual menu item. Although this can all be accomplished with applescripts, Automator gets you there much quicker in most cases.