I actually explained the difference really badly, it's essentially this:
Visual Pinball + PinMAME are emulators and need software to run, which are normally the official pinball ROM releases
FreeWPC allows you to write software that WPC/PinMAME can run. It's important to point out that this is a groundup rewrite, not a ROM hack.
Visual Pinball and PinMAME are both emulators, which come in very handy when developing FreeWPC (as you don't need a table to develop), but if you wanted to use this to develop your own custom software, you would require a PC in the cabinet + some kind of interface board to hook up to your table.
FreeWPC is a Pinball operating system for tables based on Williams WPC hardware and as such is a drop in replacement ROM, no extra hardware is necessary. In effect it's almost the same process the original game designers used, GCC has been patched to support the 6809 CPU and there's a pinball library available for common things like scores, display effects etc. The excellent manual here explains better than I can: http://www.oddchange.com/freewpc/manual/
There's a few other projects along these lines, but afaik this is the only one not to require additional hardware, P-ROC is coming along quite nicely:
I've been working on a project with Brian Dominy that allows us to produce ground up rewrites of software for 90's pinball tables, the main website is here:
This is BY FAR the coolest project I've worked on, if anyone is interesting in helping out/testing then drop me a line.