theres really no difference in function, a flashed TSOP behaves exatly like a modchip (when the modchip is on)
the only real differences are a modchip can be turned off for Live, this can also be done on a TSOP modded 1.0/1.1 with some extra soldering and a switch, 1.2-1.5 TSOPs cant be disabled, 1.6s dont have a TSOP
for TSOP advantages, you dont have to spend money for a chip, and you dont want to wait for it to arrive in the mail