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The two are designed to complement each other, sort of work hand-in-hand, but there are differences.
I'll start with Image Ready. This program is designed primarily to create Web output versions of your graphics. It does GIF and JPG compression, it will create animated GIFs, it has many functions for slicing images, etc., and lots more. For most anything you'd want to put on the Web, this program is great.
Photoshop is a much more in-depth, robust graphics program designed for creating high resolution print graphics. It has better image manipulation features, and it's the best choice for large, detailed images. Photoshop is used by professionals to create magazine ads, highway billboards, and everything in between.
That being said, the two share many functions. Newer versions of Photoshop have some of the more commonly used Web output functions (like some splicing features, and excellent GIF and JPG compression), and Image Ready has similar drawing tools to Photoshop and I suppose you could even use it to create hi-res print graphics if you really wanted to.
But of course, the two come bundled on the same disc now. I find myself using Photoshop 99% of the time. Not that there's anything wrong with Image Ready, I'm just so familiar with Photoshop and it has everything I usually need. The only time I use Image Ready is to create animated GIF images (one thing Photoshop can't do). And while it does a very fine job on those, I don't do animated GIFs much anymore because Macromedia Flash is a better alternative.
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but my wallet getting smaller 
Linear Mode
