Michael Rocharde follows up his 5 video Part 1 post on Excel vs FileMaker with a great example of the benefits of relational databases over spreadsheets: Entering data one time and using it over and over again, without having to type it in again.
Excel is an extraordinarily powerful tool for those functions it does well. But it is not, and never will be, an alternative to a relational database program. I think of Excel sheets as an easy way to manipulate and clean up data, as well as a way to move data between different data sources and types.
Follow the link to watch his 5 minute video for a more clear explanation of the differences.