Yes PieFed can federate with Lemmy fully, although the reverse is not true since there are just tons of features present in PieFed that are lacking in Lemmy - a few that are relevant here are community polls, user and post flairs, and hashtags, none of which Lemmy can display since Lemmy does not realize that such things exist. There are also still yet another ton of features that are not as directly relevant to this discussion as well, but highly worth switching to use PieFed for, such as categories of communities, user-customizeable and shareable Feeds, the ability to choose whether to receive or arguably more important to cease receiving notifications for pretty much anything at all (comments written by other people, users, whole entire communities - this one most useful for low-volume and/or highly interesting content, or you may quickly become overwhelmed, and yet the notifications also allow you to separate the different types of triggers for them so even then you can still use your PieFed instance even if you are not fully caught up).
Both Lemmy and PieFed are different implementations of the ActivityPub Protocol, both - along with Mbin and some others (nodeBB, perhaps soon flarum, etc.) - are part of the Threadiverse, which is the subset of the Fediverse that is centered not on users as Mastodon or Friendica are but rather on topic-based (aka threaded) centered around communities of a particular interest, like Reddit (except fuck spez).
So Lemmy lacks entirely some post types that PieFed has, since it does not know how to render those (e.g. user polls), and for those types that do overlap, the PieFed version is usually a much-enhanced version - e.g. it collects together all comments across all cross-posts, so that you can visualize them all at once without having to keep clicking on each one individually. This really helps with discovering new communities that you might not become aware of otherwise.
PieFed also has a new user sign-up wizard that walks you through all the questions, signing you up to communities that you express interest in, and asking if you want any content filters, e.g. how many posts do you want to see with keywords like Trump or Musk - all, none (not perfect, e.g. that keyword filter will not block images of the topic in question), or just some. The problem of onboarding new users is entirely solved now with PieFed!
Here is the major caveat: PieFed is new, and while all of the above is available both via its webpage browser UI, and also encoded into its API for use by 3rd party apps, many of the latter have not yet caught up to implementing all of the available features. I don’t use 3rd party apps so I am not really current on that state, though I will note that even using PieFed as the back-end still offers strong advantages over Lemmy, even if the rest of the daily interactions are identical - e.g. PieFed offers the ability to block all users from an instance, whereas Lemmy only claims to offer that but… it does not. That said, note that the 3rd party apps don’t usually allow you to set up such features (yet), though imho having to visit the webpage interface rarely to set up each such aspect just once is not so bad, whereupon after that your app would continue to show the data being sent by your PieFed instance. Having vs. not having the feature in the first place is much more important to me than having super convenient access to it within a particular app of choice.
I am not the best person to ask for recommendations there, but I did enjoy Voyager when I was checking apps out, and it is the most popular one (also Blorp is supposed to be really good at integrating with PieFed? I’ve never tried it so I have no idea).
Definitely check out https://join.piefed.social/, and maybe start with https://join.piefed.social/features/. The devs are super responsive, amenable to feedback, and very active in communities such as [email protected].
Whatever the reason may be - usage of Python + flask vs. Rust and having to customize all UI elements, or perhaps simply programmer skill - that allows significantly faster development time, PieFed unquestionably has the lead over Lemmy in pretty much all respects (faster, more stable, lighter-weight code, see outsider perspectives such as this one), except that ofc Lemmy was first and so has many more users. But again, you will see all Lemmy posts on an instance that runs PieFed, even though the reverse is not true. Case in point: I am on PieFed right now, while you are on Lemmy, and since none of those more advanced features are involved (like polls), this impedes us not at all. Likewise people could comment here from Mastodon, Friendica, nodeBB, etc. - for Fediverse content the absolute best experience will be had from using the software that is designed for, but others can work and I see comments from instances running those other software platforms in this community all the time.
Breathe in the free air of FOSS. No Algorithm pushing things at you. Yes in-fighting because we are humans (would you like to be forced to read MAGA content?), but this is a very different atmosphere from Reddit! You are going to love it here!