Tremolo effects modify volume. The amplitude of an incoming signal is raised and lowered in pulsating waves. An intense tremolo effect sounds choppy because the volume is essentially being turned on and off, whereas a lower intensity or depth can result in a smoother, gently throbbing sound.
Vibrato effects modify pitch. The frequency of an incoming signal is raised and lowered. The Uni-Vibe pedal, designed to emulate the Doppler effect as heard on a rotating Leslie speaker, is probably the most famous example in a guitar effect.