Fred Wilson, writing on his blog AVC.com:
A VP Engineering is ideally a great manager and a great team builder. He or she will be an excellent recruiter, a great communicator, and a great issue resolver. The VP Eng’s job is to make everyone in the engineering organization successful and he or she needs to fix the issues that are getting in the way of success.
A CTO is ideally the strongest technologist in the organization. He or she will be an architect, a thinker, a researcher, a tester and a tinkerer. The CTO is often the technical co-founder if there is one (and you know I think there must be one).
When a company has a strong CTO and a strong VP Engineering that trust, respect, and like each other, you have a winning formula. The CTO makes sure the technical approach is correct and the VP Engineering makes sure the team is correct. They are yin and yang.