I had TMCC - 1 and recently upgraded to Legacy.
There are many more features that are available only when running Legacy motive power but the ones that I provided are really universal to any Lionel Command control engine.
Some of the basic benefits that Legacy offers over first generation TMCC:
Better range - My TMCC system barely allowed for 15' before I'd start loosing connection with the base (this may have been isolated to my set). Legacy, however, offers very good reception through our entire house.
No 70's era telescoping antenna - These were completely outdated when the CAB-1 was first introduced in the 90's.
Audible and visible feedback on input - This one is huge. The squishy button and free-spinning throttle wheel on the CAB-1 made it difficult to know if your command was received or how much change you were imparting on your speed. The CAB-2 buttons deliver an audible beep and the wheel is notched so you can easily judge the amount of movement you are imparting. Also, with many commands, you get visual verification on the screen when you increase or decrease smoke output, etc.. Nothing like that on the CAB-1.
Speed steps - Along with the above mentioned, this allows for exact speeds to be input and maintained.
Lashup creation - much easier lash up builder with visual icons.
Recording capability - TMCC 1 requires the addition of the ARC for this.