In a word, yes.

For starters: the 40Gb neo uses a 3.5" drive. These are not designed for use in mobile environments and are much more likely to fail. The 40Gb empeg mk2 uses 2x20Gb 2.5" drives (you can't get 40Gb 2.5" ones) each of which is significantly more expensive than the 40gb drive in the neo.

The neo has very limited playlist and random support - for example, it can't do proper randomisation across all tunes on the disk (it doesn't have the ram to do this). The empeg, on the other hand, does do proper random shuffle/unshuffle, remembers the random playlist across poweroffs, and in 1.1 will even do things like shuffle biased towards tracks you've not heard recently (which no jukebox anywhere that I know of does). As for playlists, the empeg has hierarchical playlists & linking, the neo has limited size flat playlists.

Synchronisation on the empeg can be done via USB & Ethernet (some people even do wireless ethernet syncs); with the neo's PC bay, you have to power off your PC to load new tunes. They now have a USB bay (extra cost) which at least means you don't have to power it off.

The empeg's sound output is 4 ch (neo 2ch) with better output voltage and s/n than the neo - plus full parametric EQ too. The empeg has line in, which can then be processed by the EQ if required. The empeg has carphone mute, lights-on dimming, and a PSU which is happy with "normal" car power (unlike the neo which, at least in the first units, ran 12v 3.5" discs from about 10-11v and as such didn't work with many of them).

The empeg is smaller, and uses more advanced electronics - leading to more expensive construction and components. The neo is so deep it won't fit into most car's dashboards at all. We also provide industry-standard connections for power, etc in our wiring loom.

The empeg can be upgraded to play new audio formats - WAV and WMA, for example, are in 1.1. The Neo35 cannot support anything apart from MP2/MP3, as it uses a custom MP3 decoder chip. The empeg also supports things like VBR better (and even better in 1.1).

The neo isn't a bad solution, but it's a bare minimum solution. This BBS and its users show that many many people value the extra functionality highly. We also continue to support older models - the mk1 will run 1.1 too, for example. There are a lot more features coming which I can't mention, but I seriously doubt you'll be sorry you bought an empeg - many people who have bought Neo35's later upgraded to empegs; obviously they couldn't live with the Neo's shortcomings.

Hugo