What's the difference betwen a UserControl and a ContentControl?

UserControls are a good fit for aggregating existing controls when you don't need to provide the consumer a ControlTemplate. This means that UserControls are not lookless. Why not just use ContentControl as it can have coupled XAML like a UserControl and the implementation looks similar to UserControl? Well, there are several important technical differences you must know:

1. UserControls set themselves as the source to RoutedEvents raised by elements within them. This means that when an element outside the UserControl receives a bubbled event, the Source is the UserControl, not the thing you interacted within the UserControl. In the philosophical sense of what you often hear about UserControls, "It's for aggregating existing controls", this makes sense as you want the parent container element to think of your UserControl as a single unit. For example, your UserControl contains a button that the user clicks and the Grid that contains your UserControl instance receives the MouseLeftButtonUp event but the Button is not the Source of the event, your UserControl is.
2. UserControl sets Focusable and IsTabStop to false. You can see the philosophy demonstrating itself again here as we don't want a grouping of existing controls to be Focusable.
3. UserControl sets HorizontalAlignment and VerticalAlignment to Stretch. A ContentControl would automatically be set to Left and Top.
4. UserControl's own AutomationPeer implementation allows you to change VisualStates via VisualStateManager.GoToState(). ContentControl requires the VisualStateGroups to be at the top-level and you must call them with VisualStateManager.GoToElementState().
5. UserControl's own ControlTemplate wraps your content in a Border. This again makes sense when thinking of the philosophical use case for UserControl.
6. UserControl's own ControlTemplate provides more TemplateBindings than ContentControl. This is kind of a recapitulation of some above items but explains how they are possible. Recall that UserControl provides a Border so that relates to some of these free TemplateBindings you see below. This enables respect for BorderBrush, BorderThickness, Background and Padding properties on your control that would otherwise not work with just a ContentControl. For example, if you just derive your control from ContentControl and set the Background property on the root ContentControl element it will not work because the ControlTemplate of ContentControl has no TemplateBinding for Background. Of course you could set the Background property on the child content element that wraps your desired elements, like a Grid, but that isn't ideal IMO.

ContentControl's ControlTemplate

<ControlTemplate TargetType="ContentControl">
  <ContentPresenter
   Content="{TemplateBinding ContentControl.Content}"
   ContentTemplate="{TemplateBinding ContentControl.ContentTemplate}"
   ContentStringFormat="{TemplateBinding ContentControl.ContentStringFormat}" />
</ControlTemplate>

UserControl's ControlTemplate

<ControlTemplate TargetType="UserControl">
  <Border BorderBrush="{TemplateBinding Border.BorderBrush}"
   BorderThickness="{TemplateBinding Border.BorderThickness}"
   Background="{TemplateBinding Panel.Background}"
   Padding="{TemplateBinding Control.Padding}"
   SnapToDevicePixels="True">
    <ContentPresenter
     HorizontalAlignment="{TemplateBinding Control.HorizontalContentAlignment}"
     VerticalAlignment="{TemplateBinding Control.VerticalContentAlignment}"
     SnapsToDevicePixels="{TemplateBinding UIElement.SnapsToDevicePixels}"
     ContentTemplate="{TemplateBinding ContentControl.ContentTemplate}"
     ContentStringFormat="{TemplateBinding ContentControl.ContentStringFormat}"
     Content="{TemplateBinding ContentControl.Content}" />
  </Border>
</ControlTemplate>

Basically, the UserControl class is there for convenience. It enables us to build little parts of the UI from already existing controls, whereas ContentControls are really for creating new controls, generally with a single purpose and/or functionality.

I read a book that had a good explanation of this and by good luck, someone has 'put a copy of it online'. From the linked book:

The UserControl class is a container class that acts as a “black box” container for a collection of related controls. If you need a set of three controls to always appear together and be allowed to easily talk to each other, then a likely candidate for making that happen is the UserControl class.

Then relating to whether to create a CustomControl:

The following is a summary of the decision process:

Use the framework as much as possible. WPF provides a variety of extensible controls, so make sure that the functionality you want doesn’t already exist in a WPF control.

In many cases, the data structure you’re working with requires different visual representation. Using ControlTemplates and DataTemplates can often get you the functionality you need.

Look at ValueConverters to see whether they can help bridge the gap between the stock functionality and what you need.

Finally, see whether you can’t extend existing behavior with attached properties.

Take a look for an in depth answer to your question:

WPF Control Development Unleashed

UPDATE >>>

@MarqueIV, to answer your question more directly: The UserControl class is provided to us for convenience. That's it. If you add a WPF CustomControl into your project, you will see that it has no XAML file. This means that you have to design you control markup in a file called Generic.xaml in the Themes folder. The UserControl class gives us a XAML file so that it is easier to create them... so it is more convenient... that's it. That's the reason.

One thing that is different from ContentControl is that UserControl overrides the OnCreateAutomationPeer method, you might look for that. Maybe it has some different UI-behaviors than the ContentControl.

This method creates an UserControlAutomationPeer-instance.