Sheepskin and deerskin are both used to produce leather materials. Sheepskin is known mostly for it's soft fleece on sheep hide. Deerskin is not known for the fur from the deer, but more for the soft leather that is cleaned and stretched for clothing and materials.
Sheepskin
Sheepskin comes from a sheep's hide. When it is made into products such as gloves, hats, slippers and rugs, the fleece from the soft and warm sheep's coat is left on the hide. Along with its uses for clothing and furnishing, sheepskin is often used for materials for horse saddles and tack, since it is a flame-resistant material and is insulated.
Deerskin
Deerskin is used to produce buckskin leather, or leather from the skin of a buck deer. This material is often used to make shoes, wallets, jackets and other leather products after it is cleaned, stretched and dyed.
Comparison
The hide that becomes sheepskin and deerskin is often dyed, so the two hides can often be the same shade. However, sheepskin usually still has the fleece on the hide, and deerskin most often has the fur removed when it's used for leather products.