Gig of ram, resolution, flash, front facing camera. Also, the screen is noticeably brighter/nicer than the 520, saw them side by side in some youtube video... much nicer... sorry no source though.
anyone who mentions the processor being a snapdragon 200 doesnt know what they're talking about. I hate this idiocy. (oh mawh gawd its a lower number must be liek slower lol)
this is the lumia 535 snapdragon 200 processor notebookcheck DOT com/Qualcomm-Snapdragon-200-MSM8212-SoC.129141.0.html
This is the snapdragon 400 lumia 630/730/830 or the 'moto g' processor notebookcheck DOT net/Qualcomm-Snapdragon-400-MSM8226-SoC.111661.0.html
they score more or less the same on all benchmarks. They are both quadcore 1.2 ghz cortex a-7's. The ONLY difference is 4G capability and a slightly faster GPU (adreno 302 vs 305) in the snapdragon 400.
If gaming, 720p+ video playback, and cell data speeds dont matter to you then the 535 is fine.
In general, official apps that support quad cores will be much faster, most third party apps will run about the same or only slightly faster than the lumia 520. Here is the lumia 520's processor for you convenience notebookcheck DOT net/Qualcomm-Snapdragon-MSM8227-SoC.88499.0.html This one is a 400 because it has 4g and the adreno 305 but is essentially slower- its a 1 ghz dual core compared to the 535's 1.2 quad core
The extra memory should help with resuming apps though, so you could actually keep some open instead of relaunching them every time you wake your phone. I wish windows had a better system for offloading apps though, I wish I could give preference to certain apps.