They are also significantly smaller too, the older Apple TVs are much larger. The new Apple TV's require internet of some kind or at least a local network for stream video and movies and data from a computer or the internet. And since they aren't sold any more and are still sought after, that would explain their above average price. Though the biggest reason is most likely the hack-ability of them, they are tiny computers with a decent amount of power. Some people like the older ones also because they can be hacked and used as linux computers ( link) with actual storage and since they can also store things on them, you can take it with you and have videos/music on it and not require internet for streaming your content. 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.
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There are also a few other minor differences in size, power consumption, software options/OS and so on.
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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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