Goblins are described as green creatures that resemble Elves (not the tall and pretty ones from Tolkien's work, but rather those tiny cute ones we Brasilians call "Duendes") and generally make bad taste jokes and pranks on other beings. They're part of the Norse Folclore and are often associated with the forces of evil. They're said to be ugly and frightening, sorcerers, food spoilers and that they like to wage wars against Gnomes. Goblins can be found in mountains, swamps, forests, deserts, quarries or even cities.
Hobgoblins, on the other hand, are said to be bigger than Goblins (which measure about 1,40m), almost reaching a normal human being's height. In French Folclore, they're called Lutin (translated as Brownies in English), but are also referred in other lores as Hobs, Bogies or Boogeymans. They are often classified as spirits in the form of house animals such as dogs, rabbits or cats. However, there's no distinctive feature in any animal living near a house that can make it be considered a Hobgoblin, which is a little confusing. They can be good or bad. Good ones can control the weather or even shave the beard of the owner of the house before he wakes up on Sundays. Bad ones can pester the house's owner with little annoying problems such as hiding objects or filling shoes with pebbles. Salt is considered repellent to them and, since they're related to Fairies in some degree, steel or iron can also be unbearable to their touch.
To make things a bit more confusing - I mean, interesting - Tolkien claims that his studies on the subject of Goblin beings showed that Hobgoblins (which he called Uruk-hai in his works) were actually smaller than Goblins (his Orcs). Guess that it could only be resolved by documented sightings of these creatures, which are, sadly, very few.