Annelids and arthropods are similar in that they are both relatively small invertebrate animals with strong and obvious body segmentation, circulatory systems and a one-way gut. Scientists think annelids and arthropods share a common ancestor, or even that annelids are the ancestors of arthropods since there are species such as velvet worms that appear intermediate between them. Unfortunately, the fossil record for annelids is very poor.
While annelids and arthropods do have many similarities and are almost certainly related, their differences are many. The most obvious is the arthropod exoskeleton that annelids, with their soft moist skins, lack. In arthropods, this creates the requirement for special pores or even lungs for breathing, while most annelids breathe solely through their skin although some aquatic species have gills. It also means arthropods have attachment points on a rigid exoskeleton which annelids lack. Annelids also have a closed circulatory system, which is more efficient than the arthropod's open circulatory system.
Annelids lack any but the most primitive eyes and have no sense of hearing, instead relying on their chemical detectors and sense of touch. Not all annelids lack hard body parts, with some such as predatory polychaete worms possessing large and powerful sharp jaws.