There are a few diferences between the 2 versions - since the steam version started receiving patches it is no longer riddled with bugs.

v1.54
Human Armsman can be upgraded.
Elven Healer, Wintermage and Druid have their upgrade split into 3 individual upgrades.
Orc Fighter can be upgraded.
Troll Bouncer and Hurler have their upgrade split into 2 individual upgrades.
Most units have user interface icons, including summons.

v1.61
Orc Hornblower has a working patronise
Upgraded Orc Totem won't spam Death Grasp.
Building targeting is much smarter.
Ranged Avatar will attack automatically.
Auras aren't removed when your avatar casts a spell.