To begin with, I'm going to quote straight from one of the books I have been reading, which touches on some of the key issues.
SUMMING UP MAJOR DIFFERENCES BETWEEN ROMAN CATHOLICS AND EVANGELICAL PROTESTANTS
Regarding authority: Catholics claim that Scripture and "Sacred Tradition" are equal in authority. Protestants say the Bible is the sole guide for faith and practice (see 2 Tim. 3:16,17; 1 John 5:13). Rome says the magisterium (teaching authority of the Roman Church) has been entrusted to interpret the Bible for Catholics, who are not to interpret it for themselves. Protestants say that individual Christians can trust the Holy Spirit for guidance as they read and interpret the Bible for themselves (see John 5:39; 14:26). Catholicism teaches that Peter was the first pope, and that through apostolic succession other popes have succeeded him, each serving as "vicar of Christ"; Protestants insist the apostles had equal authority and there was no "pope"... (see Matt. 18:18; John 20:23). Catholics teach that the pope is infallible when he speaks "ex cathedra" (lit. "from the chair" or with authority) on matters of faith and morals; Protestants reply that no human being is infallible, and only Christ is head of the Church (see Eph. 1:22; Col. 1:18).
Regarding salvation: Catholics claim that salvation is secured by faith in Christ plus good works and grace conferred through the seven sacraments of the Church; Protestants reply that salvation is secured through sola fide (faith alone) in Jesus Christ's atoning sacrifice on the cross (see Rom. 3:24; Eph. 2:8,9). Catholics blend justification and sanctification into one process as the believer must work to merit eternal life; Protestants believe God justifies the believer by declaring him or her righteous, and that sanctification is a lifelong process of becoming holy as God works within (see John 17:15-19; Phil. 2:12,13). Catholics believe they cannot pay for all their sins in this life, and at death they go to purgatory for an undetermined time to be made totally fit for heaven; Protestants, believing they are justified by faith in Christ and nothing else, trust that they will go straight to heaven where sanctification is completed in Christ's presence (see 2 Cor. 5:6-10; 1 John 2:28-3:2).
This was the summary at the end of a chapter in the book So What's the Difference? by Fritz Ridenour. [If anyone who is Catholic reads this and disagrees with the information it provides about Catholicism, please leave a comment.]