Although in the beginning IEE-1394 was faster than USB, they share certain similarities and also differ in certain ways. Let's itemize some of these similarites and differences:
Both USB and IEEE-1394 use Serial Bus Standards and twisted-pair cabling to transfer data.
USB 1 has a transfer rate of approximately 12Mb/s compared to IEEE-1394 at up to 400Mb/s.
FireWire technology is better suited for use in high-end applications such as digital video where it is important to move data extremely fast.
127 devices per bus can be handled by USB while only 63 devices can be handled by IEEE-1394.
Both these standards support Isochronous devices - devices which require a certain amount of bandwidth for data streaming such as streaming audio and video.
Both devices support 'hot swapping' - been able to plug and unplug devices at anytime without powering down device.
Its complexity causes it to be more expensive to implement than USB.
To move video data from a videotape to a computer in real time you need to have a 'wide pipe' and FireWire was the perfect technology for this.
FireWire ports are found on all digital camcorders and cameras where high throughput is a necessity.
It far out-performs USB 2 and multiple devices can be directly connected to each other for extended distances without the use of a computer. This configuration is called peer-to-peer.
USB devices are 'passive' and controlled by a single external host controller. FireWire devices on the other hand are 'active' each with its own embedded controller circuitry; hence its higher cost compared to USB 2.
If FireWire devices don't need a PC, then it should contain all the necessary circuitry required to control data movement.
The revised technology is now referred to as IEEE-1394b and uses a slightly different connector with throughputs up to 3.2 Gbps eight times faster than the previous standard (IEEE 1394).
Future plans for upgrading FireWire are expected to 'bump' the speed of data transfer up to 6.4 Gbit/s.
In summing up, most upscale motherboards are now equipped with firewire ports and, as always, over 90% of digital video camcorders/cameras are now equipped with a FireWire (IEEE-1394) port.
Downloading camcorders/cameras to a PC is now a snap!