I've gotten a few emails on this already, so I thought I'd add a bit more info...
Shakes are generally hand-split. They're thicker, and the hand-splitting gives them a very rough, textured look on both sides...creating very nice shadow lines on a roof.
There are "sawn shakes" and it's tough to describe all versions, as many producers have their own versions: One is simply a thicker shingle. Another is hand-split on one side (side that goes down), sawn on the other (side that sees weather). Yet another is one that is sawn on the entire bottom, yet on the top the upper portion that gets overlapped is sawn, the lower portion that weathers is split.
Shingles are sawn on both sides. they can be rough-sawn, resawn, resawn and rebutted...all thses terms refer to how well they are sawn, from a "rough cut" to a "perfectly cut rectangle."
There are many, many grades of shingles and shakes. The grade depends on the physical size of the shingle and how many imperfections there are in the shingle, as well as where the imperfections are. Are the knots in the "show portion" of the shingle? In the part of the shingl ehtat will be overlapped? Or, is the shingle knot-free?
Lastly (I think) whee can you use shakes vs shingles? Use them wherever you want.
Shakes, because they have more wood and are more laborious to produce, are more expensive. They have a more rustic look. They are often used on roofs, and seldom used on walls because of the expense.
Shingles can be used on roofs as well, though they do not wear as well as shakes. They are very cmmon on walls as, due ot the nature of them being uniformly sawn, look nice and tidy when laid on a wall.
Red cedar is more expensive, though it weathers better than white, which is why it's more commonly used on roofs. White works well on less-stressed wall, though it can be used on roofs, too. Just don;t expect it to last as long as red when it's up on a roof.
Sorry for the length of post, and yes...this is how these products are used in MY area. Shingles and shakes can be used differently in different regions.