Contrary to common belief, a nectarine is not a cross between a peach and a plum, but a fuzzless variety of peach.
Fuzziness is a dominant trait of peaches. Occasionally when peach trees are crossed or even self pollinated they will produce some fruit whose seeds will grow into nectarine trees and others which will be peach trees. Nectarines will sometimes appear on peach trees, and peaches sometimes appear on nectarine trees. The instability of this back and forth process of gaining fuzz and losing fuzz stretches the truthfulness in labeling the nectarine as a genuine mutation.
It is impossible to tell which seeds from nectarine trees will produce nectarine bearing trees, so commercial growers take branches which produce nectarines and graft them onto peach trees. The branches will continue to produce nectarines.
Nectarine fruit can be colored white, yellow, orange, or red and the pulp also exhibits these colorations. Nectarine colors are brighter than those seen in peaches, because the fuzz on the peach tends to dilute the bright color of the skin below.
To learn more about nectarines, see The University of Arizona - College of Agriculture and Life Sciences.