In terms of game mechanics, there are few differences between NAP and confederation. The major difference is that a confederation (and not just a NAP) is required before a player can move within 10 squares of another player using Tenaril's or Exodus.
In practice, different alliances mean different things by NAPs and confederations. Most commonly a NAP is taken to mean that the parties will not attack each other, while a confederations is seen as a commitment for mutual defense and possibly even an agreement to support each other in wars.
However, the specific meaning of a NAP or confed really depends on the two alliances that make the agreement. If you're not sure, ask the leadership of both alliances what it means. They might tell you.