It says,
The Identity: is the percentage of identical matches between the two sequences over the reported aligned region (including any gaps in the length).
The Similarity: is the percentage of matches between the two sequences over the reported aligned region (including any gaps in the length).
here: http://embossgui.sourceforge.net/demo/manual/needle.html
So it's percentage of matches v. percentage of identical matches.
What is the difference?