In the 2 years that have passed since Sony launched the revolutionary T1 there have been several iterations (5 to be exact) on the 5.1 Megapixel, big screen small wonder T series. The N1 is their next big step-- it features more megapixels, a bigger screen, a better lens, improved overall image quality and a whole new touch screen user interface. All this is in a package not much larger than the original T1.
Sony also tuned in to the fact that people were using the screen on the T series to show photos to friends and turned that in to a feature on the N1. It's smart because items put in the separate sharing album are only kept at the low resolution needed to display on the camera's screen, leaving room to take more photos.
all the details at DP Review