The difference between pancetta and prosciutto is that pancetta is a type of cured pork belly and prosciutto is a kind of cured ham. Pancetta must be cooked before eating, but prosciutto can be served uncooked.
Pancetta is a type of cured pork belly that originates from Italy. It is very similar to bacon; however, unlike bacon, it is not always smoked after curing. The curing process involves salting the meat and letting it cure. Sometimes, producers use spices to flavor the meat. Pancetta comes sliced, cubed or in rolls. It can be prepared like bacon; it can be fried, added to sauces, soups or stews, used to top or stuff various dishes or used as a wrap for other meats or vegetables.
Prosciutto looks similar to pancetta at first glance, but it is a very different product. Like pancetta, it originates from Italy; however, its production process is much different. Prosciutto is made from a leg of pork rubbed with salt or a spice mix. There are two methods of preparing it: baking or air curing. The air cured variety is the most popular type of prosciutto outside of Italy. The process involves leaving the ham to slowly air dry over several months. Sometimes, the process can take several years. Once the ham is cured, it is sliced very thinly. It is usually eaten like most other kinds of ham. It can also be added to soups.