Probably the most significant difference between watching a movie and reading a book is that movies are, by their nature, linear. They continue at a steady pace without the viewer's direct involvement; they are passive entertainment, capable of reaching the viewer on an emotional level without the need for purposeful imagination. In contrast, a book is written in a linear format, but the reader can experience it at leisure. The book can be skimmed, highlighted, annotated, reread, and the reader can flip back through the pages to connect some past idea with the current page. This is certainly possible with movies, especially today with advancements in home video technology, but it is harder and requires more effort. With a book, the reader experiences the story through the mind and the imagination, only seeing the descriptions of the writer for guidance. With a movie, the viewer sees what the filmmaker intends the viewer to see; there is little scope for reinterpretation or imagination. This is not a negative aspect; many films contain intense emotional and narrative content explicitly created by the filmmakers. However, the experience of reading is very different from watching; the viewer is less likely to be emotionally committed to the movie, since it plays through and is finished. The reader can continue to experience the book over and over, with less effort than pausing and rewinding the movie.
The biggest difference that exists between books and movies is the depth and complexity present in both the character and plot development. The constraints of the typical movie allow for a basic understanding of a character but it is rare for a two hour movie to fully capture the essence of a character in the way a great author could in a book. Books afford the opportunity to fully examine events and people necessary to bring a complete understanding to a situation, while movies typically focus on major events and ideas and often leave out key elements present in their literary counterparts.
Another significant distinction between the two is the goal of the work. Some say most movies seek to entertain the audience, while the goal of most books is to tell a story. That doesn't mean that a movie can't be informative or a book can't entertain, but again, it is extremely difficult for movies to build relationships between the characters and the audience in the way books can. The following quote really targets this difference:
"You know you've read a good book when you turn the last page and feel a little as if you have lost a friend."
This type of emotional connection between a book's reader and its characters is rarely found in their cinematic counterparts.