Although they are both magnetic proximity sensors, hall effect sensors are significantly different in the way that they function. A hall effect sensor is a three-wire, solid state device whose output changes when exposed to a magnetic field. A reed sensor, on the other hand, is electrically a switch with tiny contacts that open or close in the absence or presence of a magnetic field. In many applications either device could be used, but there are also some situations where one technology may be preferable over the other.
A hall effect sensor may be preferable to a reed if you are looking at a long (in theory unlimited) life. For example, if you are interested in sensing a spinning magnet that will operate a sensor billons of times you should consider a hall effect sensor. Reed sensors generally have a very long life compared to other electromechanical devices, but they cannot match the virtually infinite life of a hall effect sensor.