Comparing Lightroom and Photoshop is like comparing apples and oranges --or perhaps slightly more relevantly it would be like comparing iTunes to something like Logic or Reason.
The way I think about it, is Lightroom is like iTunes for photos (minus the store element). It allows you to organise all your images, and make some basic tweaks to their appearance, like contrast levels, brightness etc. in the same way that iTunes allows you alter the volume levels of your music. But primarily it is for organising and collating a database of all your photos. It allows you to rate, categorise and tag the images, again very similar to the way iTunes handles music.
However, Lightroom is not a full blown image producing program, in the say way iTunes isn't a music producing program. This is where Photoshop comes in. It is the industry standard for editing, processing and producing images and photos. It's abilities are comparable to music producing programs, such as Reason or Logic. It allows you to create images from nothing but a blank canvas, or alternatively edit your photos into something completely different.
Cheers