The main differences are in the interface (GUI) which is not as polished as V4.... The main issue is that phones with V2.3 tends to be on phones which dont have very much RAM or internal memory (because they are 18months old!) Having said that V2.3 does allow apps 2SD card (use of added SD memory card to store parts of apps - this cannot be done in V4 without rooting)
There are some apps which dont work (have not been ported backwards) in the older versions of android but if you ignore vanity, keeping up with Joneses etc there is little real function that is missing in v2.3 I'm sure some would disagree but thats just my view.
There's also an issue about how the internal storage is partitioned into a section for apps and a section for user files: the bit for apps tends to get filled really fast. Later versions of Android treat internal storage as one big block that can be used for apps and user files.
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