As far as I know, stateflow and simulink are often used at the same time, and are both environments developed by MathWorks, who make Matlab. May I know what's the difference between them?
Simulink is largely a controls oriented solution. It graphically depicts math like products, sums, integrals, etc. However, it's conditional logic facility is lacking. Any kind of if construct quickly becomes terse and unmanageable in my opinion. I've seen many models, and there is a clear line here where Simulink should end and Stateflow should start.
Stateflow deals extremely well with logic and, of course, state machines. Now with the addition of the Simulink Function blocks within Stateflow, we have a powerful combination to allow the state machine in Stateflow direct the rest of the program.
As far as functionality goes, they are both functionally complete, meaning anything you can code in C, you can code in Simulink or Stateflow. However, I would not recommend coding a PID loop in Stateflow, but it's possible. You could also easily create a state machine in Simulink, but I'd advise against it.
As far as code generation; in the beginning of the meld, the Stateflow and Simulink had separate code generators that were sewed together with more Simulink generated C code at code generation time. Then came CGIR (Code Generation Intermediary Representation), which unifies the code generator between Stateflow and Simulink. It came around 2007, and has continued to deliver substantial increases in performance. Generated code has increased in on target performance to a point where companies can use the code in their embedded systems and actually get a performance benefit rather than take a small hit. Also, the time to generate the code has also decreased substantially. CGIR is a replacement for the Target Language Compiler, however, never fear, TLC API will still be available, perhaps forever for those who have developed massive libraries of proprietary code generation libraries.
Hope this helps, let me know if something sounds fishy or if I need to clarify.