What is Compass, what is sass...how do they differ?

From Sass and Compass in Action, by Wynn Netherland, Nathan Weizenbaum, Chris Eppstein, and Brandon Mathis:

1.3 What is Compass?

Compass helps Sass authors write smarter stylesheets and empowers a community of designers and developers to create and share powerful frameworks. Put simply, Compass is a Sass framework, designed to make the work of styling the web smooth and efficient. Much like Rails as a web application framework for Ruby, Compass is a collection of helpful tools and battle-tested best practices for Sass.

(emphasis added)

Compass is an extension of Sass (as in Compass requires Sass). It has its own compiler (instead of sass --watch, you use compass watch). It has a large collection of mixins and functions that you'll find incredibly useful (while commonly pointed to for generating vendor prefixed CSS3 properties, it can do things like automatically generate spritemaps and the CSS to go with them).

Compass is also built in such a way that you can bundle your own bootstrap type library for easily deploying in multiple projects without the need to copy/paste the source for it in each one.