An earlier version of this article was published here.
Note: The following observations reflect my personal understanding of the differences between the two services, based on my own and others’ observations. They do not include private information received from any of the vendors involved.
Ingram is the largest worldwide distributor of print books. When a bookstore orders a book, it probably comes from Ingram (perhaps through an intermediary).
Ingram offers two services for publishers: Lightning Source International (LSI) and IngramSpark. The former is for “real” publishers and was all they offered until a couple of years ago. Its contracts are daunting, its interface is a bit clumsy, and its communications are a bit slow and sometimes cryptic (especially to indie publishers who aren’t familiar with publishing industry terms). Indie publishers and others lamented, and Ingram offered a new service, Spark, with a friendlier front end and slightly more restricted discounting terms. They stopped letting most indies into LSI once Spark was launched (I got into LSI just in time). Both systems, I understand, use the same back ends and services — the only difference seems to be that there are fewer discount terms on Spark, and the front end/customer service is easier for the newbie.
Ingram will charge you for returns, an area that terrorizes new indie publishers because they don't know what to expect. (These days, it seems to be pretty harmless, now that bookstores have adopted just-in-time ordering practices instead of ordering in bulk and returning leftovers. UPDATE (2017): I no longer allow returns, since I don't expect to be stocked on bookstore shelves without some form of significant marketing, and that removes one financial risk area. I may revisit this once I step up to that form of marketing.)
CreateSpace (CS) is owned by Amazon and intended for indie publishers. It’s very user friendly, with good customer service. It had a fee per book, just like Ingram, but then dropped that altogether. It lets you use a CS ISBN if you don't have one of your own. (Ingram requires you to have your own ISBNs, like a “real” publisher). In fact, it requires a CS ISBN for the Library portion of its expanded distribution service, presumably due to its relationship with Baker & Taylor.
There are two basic levels of CS distribution: Amazon-related, and expanded. The Amazon-related is closely tied to the KDP program, so linking your ebook and your CS POD book is very easy. CS also offers a webstore, for what that's worth (I've never sold a book there).