The 1080 HD playback is nice, but depending on your TV, may or may not be noticeable/important. Airplay is probably the biggest feature that makes people who don't want to hack to jump ship to the newer box. The new Apple TV's do not have hard drives or Component Cable outputs and support Airplay out of the box. There are also a few other minor differences in size, power consumption, software options/OS and so on. Also, the newest Apple TV, the 3rd Gen, allows for 1080p HD playback, where the older ones only support 720p HD playback. They also do not support Airplay with out a hack or a software fix. The other things is that they can connect to TV's through Red, Blue, Green Component Cables. The only super major differences the 1st Gen Apple TV's has from the new ones is the ability to store Movies, Music, Content, etc because they have a physical hard drive in them for doing those things.
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