The main difference is the direction of rotation. I believe the original rotavators rotated so that the tines threw the dirt up, while most rototillers rotate so that the tines cut down into the dirt and carry it down and back.
I suppose there are also different sorts of tines.
A rotary hoe also kills earthworms.
http://en.wikipedia.org/wiki/Cultivator
There are also spiked rotors and power harrows.
they are good for getting a tilth for sowing if the soil has a lot of trash on the surface (remnants of oil-seed rape stubble, kale stumps) which would be difficult to bury and yet chop up nicely once through this.
Also if we want to re-seed a field we spray it with round-up (kills everything) we then lightly rotavate it to get some tilth, sow the grass-seeds and then chain-harrow a few times. This is especially useful where the ground is steep, or stoney when ploughing would be a costly and needless exercise in order to prepare a seed-bed.
And if we are ploughing down a grass field for a new crop then we rotavate it first to chop up the grass turf so that when it is ploughed all the grass goes in the bottom of the furrow. Leaves a nice clean finish.
In years gone by farmers used to deep rotavate a field prior to planting potatoes in order to get a deep soft tilth which allowed it to be ridged up easily during the planting process.
As you say over use and especially in wet conditions will murder the soil, just got to use a bit of savvy really.