Voice of Reason was way off on his definitons there. Once again, ignorance breeds support for capitalism.
Socialism: Socialism is characterised by redistributive policy, government running of the economy, and a completely planned economy, so as to not waste human or natural resources. (Obviously, that's a very bief definition, if you want a further definition ask me in an economic forum). Contrary to Voice of reason's definition, socialism does not eliminate the disparity of wealth but rather reduces it through the said redistributive policies. Therefore, motivation based on the desire for more wealth still can exist under socialism.
Capitalism: It is, in short, human production strictly for profit. It is characterized by by the private ownership over the means of production, that is, laissez-faire conditions, and the lack of a redistributive policy. Wages are set by employers, and, unless government intervenes, no minimum wage is seen. Capitalism usually involves mass unemployment and extreme inequality, again unless the governemnt intervenes.
Note that both are economic systems, not forms of government. Neither capitalism nor socialism is defined by the existence of democracy or despotism.