The short answer is that the Nebula is voted on by science fiction writers, while the Hugo is voted on by science fiction fans. I suppose one could think of the Nebula as being more like the SAG Awards, and the Hugo as being more like the MTV Viewer’s Choice Awards.
The Nebula Award
The Nebula was started in 1965. It is mainly awarded for writing–novels, novellas, novelettes, and short stories–although every year there are also a couple service awards and one for “best dramatic presentation,” which is usually a film.
It is awarded by the Science Fiction and Fantasy Writers of America (SFWA), which is a professional organization for science fiction and fantasy authors. There are several levels of membership, which are determined by how much you have published, and you can only vote on the Nebula if you meet the criteria for being in one of the top two levels. To be in the second-highest level you have to have sold at least one short story to a professional publication (the SFWA has a list of the ones they will accept) and you have to have been paid at least $50 for it. To get into the top level you have to have sold three short stories or one novel or one full-length professionally produced dramatic script.
So in order to vote for the Nebula, you really need to have some author props.
The Hugo
To vote for the Hugo, on the other hand, all you have to be is a supporting member of that year’s WorldCon (World Science Fiction Convention), which you can do by paying $50 to the World Science Fiction Society. That gets you the right to vote for the winner among the current year’s nominees, and nomination rights for next year’s awards.
You don’t even have to attend the convention. The only caveat is that you can only nominate up to five works each year.
The Hugo is older than the Nebula. It was first awarded in 1953, skipped in 1954, and then awarded every year from 1955 until the present. It is awarded in a wide variety of categories which change from year to year and can include books, films, TV shows, fanzines, art, and people. My personal favorite is a special award given in 1969 to Neil Armstrong, Buzz Aldrin, and Michael Collins for Best Moon Landing Ever.
The Hugo Awards are named for Hugo Gernsback, the founder of Amazing Stories, the first major sci-fi magazine in the United States.
Sources
Another Fan's Nebula-v-Hugo Analysis
The official Hugo Awards website
The official Nebula Awards website
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