A cocoon is a covering made of silk that encloses a pupa, and a chrysalis is the pupa of a butterfly. The chrysalis is covered in a hard, chitnous shell. Note the difference: A cocoon is a covering of a pupa, and a chrysalis is a particular kind of pupa, usually with no enclosing cocoon. Inside a cocoon, you will often find a pupa of a moth or other insect with an inner chitinous shell, but it is not called a chrysalis unless it is the pupa of a butterfly. The pupae of some insects have visible external body structures, such as wings and legs, as they develop, while others (such as moths) have a smooth outer shell that encloses the developing structures. See http://en.wikipedia.org/wiki/Pupa
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Butterflies hatch from a chrysalis, a life stage made of a hardened protein. A cocoon is spun from silk and surrounds the pupa of many moths.