As noted on the tech specs page of the Apple website, it now boasts a rather unique single-core A5 system-on-a-chip—an upgrade from its previous A4 processor but lacking the dual-core prowess of the iPad 2 and iPhone 4S.
Elsewhere, RAM has been upgraded, with a 512MB Hynix chip providing a little more breathing space than the previous 256MB chip. In terms of storage, the device still employs 8GB of flash, supplied by Toshiba. It also contains an extra WiFi antenna but, umm, nobody is quite sure what improvement that brings.
All in, the bump in RAM and processor specs suit the jump in graphics performance—with the device now handling 1080p video—but little more. But then, that's fine, because it's only designed to stream media, so all it needs to do is run an OS and buffer content. For the price—$99—it's still a neat little device. [xbmc.org via Apple Insider]