Selenium 1 or known as RC (Remote Control) and Web Driver differ in many aspects but the key difference comes in the implementation layer or in simple words the architecture of both of them.
As name suggest, RC is a Remote Control which works by taking the remote of the browser and then injects the automation code to be tested by injecting the custom scripts written.
The Web Driver (known as Selenium 2) works on the browser directly and uses browsers in-built features to trigger the automation test written by tester. Web driver is the successor of Remote Control.
The architecture of Selenium Web driver is as follows -
Selenium 3: For users of Web Driver API’s this is drop-in replacement. The major change being, removing core and replacing it with back-end Web Driver. Selenium 3.0 has become a W3C (worldwide web consortium) standard. Also, Selenium 3 would be majorly looking to be a choice of software testing tool for both web and mobile based applications.