In short, flamenco guitars are better suited for flamenco music than classical guitars. Some modern flamenco guitars (flamenca negra), however, use similar materials to high-end classical guitars. These guitars hope to capture some of the sustain achieved by concert calibre classical guitars while retaining the volume and attack associated with flamenco.
Quote by breakdown123
Is there such a thing as a heavy riff with out chugging on the e string?
flamenco is thinner, different wood, and is usually equipped with a thing like a pickgaurd. You can play both styles with the different types, just flamenco plays flamenco slightly better and classical play classical music slightly better.
The difference in tone is enormous, where a classical guitar can sound fat, warm clean or muffy or whatever. A flamenco guitar is meant for only one thing, enough volume to get heard next to dancers and singers. This means the wood must have good attack and high in teh resonance register to get heard.

A flamenco guitar has a very dry, earthy even harsh tone and a cheap flamenco guitar will sound like it's a lowest of the range plywood classical. This is why there aren't a lot of cheap ones.

The setup is also different, the strings on a flamenco guitar are much closer to the guitars fretboard and body. Theres a golpeador on the guitar and they're a bit thinner most of the times.
Wise Man Says: The guitar is obviously female, she's got hips, breasts... and a hole.
UG's Flamenco Club