A short and simple answer...
Clustering is when you have two servers using a shared set of hard drives.
Clustering is used for fail-over, when the primary server fails, the secondary server automatically takes over. The end user shouldn't really see anything happen.
Log shipping, you are sending the data to another server (stand-by server). When your primary server fails, you have to manually direct the users to the stand-by server.
Clustering can be difficult, but so can log shipping and so can replication.
Clustering requires two servers and one shared hard drive array.
Log Shipping and Replication requires two complete servers, they don't share a hard drive array.
Clustering requires Microsoft Advanced Server and clustering software along with SQL Server Enterprise Edition and appropriate licenses.
Log shipping and Replication requires whatever MS operating system you want as long as it works with the version of SQL Server you want.
-SQLBill