What's the difference between sixteenth century counterpoint and eighteenth century counterpoint? Is sixteenth century counterpoint melody or modal based (as this answer suggests) and eighteenth century counterpoint harmony based? If so, what would be the difference? I want to start studying counterpoint and want to know these basic facts to see where to look at.
Simply put the difference between how counterpoint was employed in the 16th vs. 18th century may be best illustrated by comparing the music of the most outstanding practitioners of each period, namely Giovanni Palestrina and J. S. Bach.
You are on the right track in thinking that "sixteenth century counterpoint melody or modal based (as this answer suggests) and eighteenth century counterpoint harmony based."
Music composition students will generally take a semester of Species Counterpoint which covers the 16th century practice and then take Counterpoint which covers the 18th century the next semester.
One of the key differences is how Bach was able to employ harmonic counterpoint to evolve the canon into the fugue.
Another way to look at this might be to use cinema as an analogy. If I were making a modal film I would might be only showing you things in monochrome, while in a tonal film I would have everything in color, or a modal film may have all objects of the same proportions while a tonal film would have objects of varying proportions which create a harmonic or balance of proportions.
UPDATE: I was requested in the comments to add more technical details:
1) Modulation: when the music moves from one tonal center to another. This is found in harmony not modal.
2) Contrary motion: when melodic lines move in opposing directions, this may be found in both.
3) Form: compositional forms of the 16th century included masses, offertories, madrigal, motet, hymns, magnificats, litanies. While 18th century harmony had these forms: preludes, fugues, toccatas, inventions, variations, concertos, dance suites, and sinfonias to name a few.
This is not a complete list so it is advised that you do some homework and read up on each of the terms listed above.
Much of the difference lay in the "rules" of how counterpoint could be used in each period; for example, the approach to using dissonance. In earlier counterpoint, dissonance had to be approached step-wise, couldn't occur on a "strong" beat e.g., a downbeat, etc. As things progressed, many of these sorts of strictures loosened and the various techniques of counterpoint started being used in much "freer" ways.
Now, when I say "rules" or "had to be used" and things like that, obviously this is a pedagogical thing; teachers would pass rules on to students. It's not like if you used a third leap to a tritone your song would break, or something, but all the learned heads of academic and church music would SAY your song was broken and ban you from writing music ever again or something. ;-)
I would like to introduce you to the 16th century Palastina style counterpoint. It is a 35-year-old book that has been studied and published based on 160,000 pages. For more information, see the this link.