What is the difference between baking soda and baking powder?

Both baking soda and baking powder function as leavening agents. They are added to baked goods to prompt them to rise. Baking powder contains baking soda, but the two are used under different circumstances. 
 
Baking soda is pure sodium bicarbonate. When it is combined with moisture and an acidic ingredient such as yogurt, chocolate, buttermilk or honey, the resulting chemical reaction produces bubbles of carbon dioxide, causing baked items to rise. Because the reaction begins upon mixing the ingredients, the item should be baked immediately or it will fall flat.
 
In addition to sodium bicarbonate, baking powder contains an acidifying agent such as cream of tartar and a drying agent such as starch, which keeps the powder from caking. Depending on its composition, baking powder may be  a single-  or double-acting ingredient. Because single-acting powders are activated by moisture, recipes incorporating them must be baked immediately upon mixing. Double-acting powder reacts in two phases, once when it is added to a liquid and again when the powder encounters oven heat. Items including double-acting powder can stand for awhile prior to baking.  Some gas is released  when double-acting powder is added to a recipe, but the majority is released after the temperature rises in the oven.
 
Most commercially available baking powders are double-acting. However, some bakers insist that double-acting powder can leave an unpleasant aluminum sulfate flavor in the final product.
 
Source(s):
About.com "What Is the Difference Between Baking Soda & Baking Powder?"
Monkeydish.com "Baking Powder and Baking Soda"