The WDTV does not support RMVB, nor does the WDTV Live. If you want something that does, you can get the ASUS O!Play - TV HD Media Player (Black). The interface is not nearly as pretty or easy to use as the WDTV, but it's a cheap and capable player.
Another difference is that the older model doesn't allow file management, you cannot copy, move, or delete files between usb drives. I don't know if that has changed with the firmware update, but if anyone can answer that here, I would appreciate it.
Another question I have is does the Live natively decode DTS?