Just found this thread and I feel it deserves a better answer than a sales pitch, even if this is the Wowza forum. :)
From what they do, they are essentially the same. However, Red5 is open source, free, and currently in "release candiate" state. Wowza is closed source payware and quite mature. The question is, who should pay for Wowza and who should use the free Red5. If you have to ask what the difference is, you probably want to use Wowza. :)
From personal experience:
- Red5 is way less resource hungry than Wowza. It is also a lot faster.
- Red5 is very badly documented. At the very least you need a good understanding of Java and networking to make sense of it. You should also work from the SVN.
- Red5 is developed by volunteers, as such there is no support other than people helping each other in a mailing list. You need patience and the skills to help fix your own problem.
- Red5 has had several critical bugs between 0.5 and 0.9 (that's when I switched to Wowza) whereas Wowza has been very solid for me. (Though so far the latest red5 trunk seems to be stable)
Wowza is quite expensive, but has a smart licensing model, making it affordable for almost everyone. If you are a techie starting a low budget project, go for red5. If you don't have the time or skills to mess with badly documented software to save 60 bux per month and the extra hardware, go for Wowza.