It has double the flash memory (program space), so you can fit a bigger program on there. Main advantage is the ability to use Webbotlib, which as far as I can remember no longer supports ATMega168 or lesser memory. I'm not too sure if it'll need any modifications, but if it does, it'll be in the setup section - no hardware changes, as its a pin-for-pin replacement, but there may be some avrdude settings you'd have to change.