There are hardware differences and peripheral differences. What can be accomplished or run on a Model B that cannot be done with a Model A? Are expansion boards being designed to be compatible with both? When available, other than cost, is there an advantage to ordering the Model A?
The model A only has 1 USB port and no Ethernet port, whereas the model B has 2 USB ports and has an Ethernet port.
Although the model B is the only one currently available, the Foundation's aim is to sell the model A at $25 and the model B at $35. Apart from the lower price, model A also offers small advantage of using less power, hence it can be powered by 500 mA power supplies.
Originally model A was only supposed to have 128MB of RAM - but it's now going to ship with 256MB (B will soon be shipped with 512MB for the same price). You may still see references to different memory in old literature.
sice 14.07.2014 the Model B has been replaced by Model B+.
More GPIO. The GPIO header has grown to 40 pins, while retaining the same pinout for the first 26 pins as the Model B.
More USB. We now have 4 USB 2.0 ports, compared to 2 on the Model B, and better hotplug and overcurrent behaviour.
Micro SD. The old friction-fit SD card socket has been replaced with a much nicer push-push micro SD version.
Lower power consumption. By replacing linear regulators with switching ones we’ve reduced power consumption by between 0.5W and 1W.
Better audio. The audio circuit incorporates a dedicated low-noise power supply.
Neater form factor. We’ve aligned the USB connectors with the board edge, moved composite video onto the 3.5mm jack, and added four squarely-placed mounting holes.
The Model A doesn't have a USB hub chip, Ethernet jack, nor a Ethernet chip; has fewer LED lights, 1 less usb port and half the RAM of the Model B; and has one or two very minute differences. However, it uses less power.