The main difference, I feel, is the content. As several of you have already mentioned, the content on youtube is submitted by users- essentially anyone. This then, is reflected in the variety of, in pleasant terms "stuff", that the site offers for viewing. I guess I'm never really surprised at what I can find on there. Not to discredit youtube too much, there is definitely a lot of legitimate content as well. There is some network submitted content. Youtube kind of appears to be a source of mindless entertainment.
Hulu on the other hand, features only content submitted by networks, thus it's more "filtered". The video content is provided in flash format & offered in a variety of resolutions. While hulu is great if you missed an episode, or feel like doing a season binge, some of the content is dated & has kind of proved unappealing to me. Hulu's sophistication in comparison to youtube is also reflected in its stylization.
I agree Hulu is more sophisticated, hah but honestly there are better movies (albeit chopped into pieces on youtube). Have you seen that selection? It's terrible. I agree too that youtube is mindless entertainment mostly...but I wish it was easier to find the good stuff somehow.
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