Both umbrellas and softboxes are used to create soft lighting.
Studio photographers have a number of choices when creating soft light, which is diffuse light without harsh shadows. The two main choices are between softboxes -- large semi-transparent devices that light shines through -- or umbrellas -- devices a light can bounce off of or through. Each has advantages and disadvantages, depending on the subject.
Quality of Light
Umbrellas typically produce a much broader, omnidirectional light while softboxes create a narrower path of light. Each of these can be desired, depending on the situation. Umbrellas work best when lighting a large area or a group of subjects. Softboxes work best when creating intimate lighting. A softbox may be preferable when shooting a single custom portrait, but an umbrella would be better for general soft lighting.
Portability and Accessories
Umbrellas are typically easier to pack and travel with and are cheaper than softboxes. This makes them a great choice for active, quantity-based jobs. Softboxes have different accessories, such as grids, barndoors and masks, that can be used to carefully direct the flow of light. This makes softboxes great for important jobs or extremely high-quality photography.
Reflections
Reflections can be an important feature of some subjects. People typically only have reflections in one area (the eyes), while some metal objects are entirely reflective. Some photographers prefer softboxes to umbrellas simply for the shape of the reflection. Umbrellas produce round reflections because of their shape and can sometimes produce noticeable or unnatural reflections. The straight edges produced by soft boxes often are more appealing when reflected by a curved object.
Setup and Price
Umbrellas are typically much easier to set up than softboxes. Umbrellas need only to be extended and mounted while softboxes may need to be assembled via Velcro straps and then mounted to the front of the studio flash with a bracket. Umbrellas are typically cheaper than softboxes as well.
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