A freelancer gets paid when he works.
An entrepreneur makes money while he sleeps.
A freelancer says, "It couldn't work without me."
An entrepreneur says, "Only tell me what happened today if it was an exception."
A freelancer takes his time and trades it for money.
An entrepreneur takes other peoples money and takes risks with it. He then (hopefully) sells the company and gives them 10X their money back.
One isn't better than the other. But it is important to understand which one you are.
// <![CDATA[
tweetmeme_source = 'jondale';
tweetmeme_service = 'bit.ly';
tweetmeme_url = 'http://www.jondale.com/blog/2010/10/entrepreneur-or-freelancer.html';;
// ]]>
http://tweetmeme.com/i/scripts/button.js
Jon Dale 
Jon,
I agree it’s important to know which you are however I disagree that someone who is a freelancer cannot make money while he sleeps. In Seth Godin’s recent tour he spoke of himself as a freelancer and I think he makes money while he sleeps with the number of books he has that continue to sell. Artists also sell while they sleep if they’ve created a product such as CD’s, prints, etc. An entrepreneur may make more as they tend to build businesses that hire employees, a freelancer can still make money while they sleep not just when they’re working for someone else.
James,
Thats a really good point.  Id probably look at it this way.  Creating things that produce residual income is an inherently entrepreneurial activity. But its one that many freelancers can and should take advantage of.
I think Seth is primarily a freelancer (professional speaker) but I think hed also admit to having some entrepreneurial tendancies (squidoo). 
Thanks for reading and commenting,
Jon