The simple difference between a traditional funeral service and a memorial service is that a traditional funeral has a casket present, and a memorial service, or celebration of life is a gathering where a casket is not present (although the urn with the cremated remains may be on display).
A memorial service/celebration of life can be held in a church, the funeral home or a community hall, or somewhere of importance to the deceased and family. There is usually music, selected readings, and a eulogy.
It's interesting; funerals and memorial services/celebrations of life have much in common, yet they often appear very different. Each is a ceremony; a gathering of people who share a common loss. It's just that one is often more rooted in tradition, while the other is the result of recent changes in social values. But both serve to do three things:
1. Help the bereaved family, and their community, publicly acknowledge the death of one of their own
2. Support the grieving family by surrounding them with caring friends, co-workers, and neighbors
3. Move the deceased from one social status to another