Understanding the difference between Object.create() and new SomeFunction()

I recently stumbled upon the Object.create() method in JavaScript, and am trying to deduce how it is different from creating a new instance of an object with new SomeFunction(), and when you would want to use one over the other.

Consider the following example:

var test = {
  val: 1,
  func: function() {
    return this.val;
  }
};
var testA = Object.create(test);

testA.val = 2;
console.log(test.func()); // 1
console.log(testA.func()); // 2

console.log('other test');
var otherTest = function() {
  this.val = 1;
  this.func = function() {
    return this.val;
  };
};

var otherTestA = new otherTest();
var otherTestB = new otherTest();
otherTestB.val = 2;
console.log(otherTestA.val); // 1 
console.log(otherTestB.val); // 2

console.log(otherTestA.func()); // 1
console.log(otherTestB.func()); // 2

Notice that the same behaviour is observed in both cases. It seems to me that the primary differences between these two scenarios are:

• The object used in Object.create() actually forms the prototype of the new object, whereas in the new Function() from the declared properties/functions do not form the prototype.
• You cannot create closures with the Object.create() syntax as you would with the functional syntax. This is logical given the lexical (vs block) type scope of JavaScript.

Are the above statements correct? And am I missing something? When would you use one over the other?

EDIT: link to jsfiddle version of above code sample: http://jsfiddle.net/rZfYL/