Mature trees can be separated by the orientation of the foliage. Incense cedar foliage fans lie vertical, while those of red cedar are horizontal.

The fragrance is very different too, foliage of red cedar smells like, well, cedar, while that of incense cedar is much stronger and sharper and medicinal.

At the one gallon size, your safest bet is to look at the leaf scales with a magnifier. Red cedar leaves are short necked scales in alternating pairs. Incense cedar leaves are long necked scales in a group of 4.

Hope that helps! Conifers can be a b!!!ch to distinguish. Cones are best but you don't get cones on a one gallon plant.

Leaf scales on the Thuja (western red) will be deep green on top, paler green on the underside and with a faint white marking. The leaf scales on the Calocedrus (incense) are a deep, lustrous green on both the top and bottom and with no markings. The aroma of the western red cedar should be fruity and detectable without crushing, while the aroma of the incense cedar is released with bruising or crushing.

Here's my little incense cedar that has done well from the day it was planted (whew!)

Have to take pictures of the western red cedars that are now rip-roaring. Have some varieties nobody knows what they are. Here's some zebrina foliage, really like the variegation, blurry pic but the colors are there:

That zebrina almost completely croaked, lost its leader after it was planted, but has come back in splendid form, very healthy new leader. These trees like to be frequently watered but not stand with wet feet.

Lilydude, post pictures of your new babies. It's fun to watch their growth.

The Oregon State website is great for this type of thing. See the link below for a comparison of the two branchlets (although they chose a pic that isn't that clear IMO). Someone already called the calocedrus fluffy--great term. The scales also have been described as like a wine glass or champagne flute. The thuja branchlets are more of a drooping fern shape.

Here is a link that might be useful: Branchlets comparison

Thanks to everyone for the great information. Love that side-by-side photo, digdig.