An emulator does exactly as it says: it emulates. It creates an environment that appears to a running program to be identical to the real thing. This is done by emulating the hardware (e.g. BSNES), emulating the runtime environment for a native binary (e.g. VMware), or most commonly, a mixture of both.

A simulator -- at least in the world of Apple iOS development -- does not attempt to emulate iOS hardware, or even the iOS operating system. All the simulator does is provide a virtual display and launches an instance of Launchpad.app. Your app then runs within that virtual display, and talks with natively compiled copies of the iOS APIs, but otherwise it's a normal Mac OS X process that can be viewed and poked with Activity Monitor, or top, or whatever.

The simulator doesn't need to "boot up". There are no virtual drivers. There's no memory management. There's no emulated silicon whatsoever.

The only downside to this approach I can see is that the simulator can't be used to test some things like resource limits, and some things behave very differently, like OpenGL. But you have to test on real hardware anyway, and Apple have made native testing just as easy as simulated.

Thanks a lot for bringing up this subject. I feel unimaginably ashamed for never considering iOS Simulator was in fact, as the name might suggest, a simulator!

In the iOS sense of the question:

An emulator would be binary compatible with the actual device by emulating the ARM instruction set on top of x86. The iOS simulator doesn't do this but instead runs a flavor[1] of iOS natively directly on x86 that is API compatible but not binary compatible (i.e. compiled binaries for the simulator cannot be ran on the devices).

[1] The simulator OS also has distinct limitations that diverge from the real device or what you would expect from a truly emulated environment. There's no motion detection, no GPU performance, no accelerometer or compass, location data is simulated, multitouch input is limited, some frameworks are not available, etc).

Even if the environment was "truly emulated", there would still be no motion detection, accelerometer, compass, location data or multitouch input.

Nor is it likely for the emulated environment to be able to provide a sufficiently accurate performance analogue to the devices' CPU and GPU.

The simulator is the ideal development environment: stupidly fast, and completely reliable for most day-to-day development tasks. For Apple to provide more accuracy in the simulator would be a waste of their time, when you can just as easily run your app on a device.