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Tremolo and Vibrato - from Fender™ Tech Talk
These two words are often used interchangeably, but in fact they aren't the same thing. Although they're sometimes perceived as somewhat similar effects, tremolo and vibrato are two separate and different physical and acoustic concepts, and people sometimes say one when they actually mean the other.
Nontheless, tremolo and vibrato continue to be used interchangeably. The main reason why is that for decades, guitar and amp makers - Fender included - have labeled the mechanisms of vibrato-equipped guitars as tremolo circuits as vibrato-equipped devices.
Vibrato is a pulsating sound effect produced by slight and rapid changes in the pitch (frequency) of a note. It has been used for centuries as a technique for adding expression and coloration to music, and it is characterized by two parameters, depth (the amount of pitch variation) and speed (how quickly the pitch is varied).
Tremolo, on the other hand, is a trembling or "shuddering" effect produced by slight and rapid changes in the volume (amplitude) of a note. It too has existed for hundreds of years as a musical technique, but for our purposes it is a much more recent technicial innovation used in amplifier design. It is characterized by similarly labeled parameters, including depth (the amount of volume variation) and speed (how quickly fluctuations in volume are varied; also variously labeled as rate or intensity).
In short: Vibrato deals with change in pitch (e.g.guitars); Tremolo deals with change in volume (e.g.amps).