Steve: You really see the primary advance in error correction and tracking? Hmmm... I don't think I'd second that. The error correction scheme hasn't changed since cdps were introduced, and very scratch tolerant models also exist since quite a long time (for example, the Technics players with three-beam lasers always seemed pretty good at that to me...). And when it comes to cd-r compatibility: Strangely enough, most older cdps I know didn't have a problem with that, whereas there seemed to be quite a few problematic models in the late 90s - which almost seems as if the industry was determined to tackle the copy problem that way, at least for a while...
I'd probably see the most advance in price/performance - driven by component integration, techniques like digital filtering or single-bit dacs and, of course, also high production volumes, which all helped to bring down the prices significantly.
Greetings from Hannover!
Manfred / lini