As far as can be told, it'll sound the same with headphones, will sound weaker with amps and such (lower line out level) but has a dedicated line out on the cradle.
I think it comes down to how important having an LCD on the unit is and how important having NetMD is. Many use the LCD in live recording situations (concerts, lectures, etc.), so to some it is essential and thus the DR7 is the better choice. For others, it serves little real purpose at all, and thus the DR7 is the better choice. NetMD gives you the ability to transfer MP3s in hopefully what winds up being faster than real time. It lets you title via computer which is helpful for those without faster titling options than with a units remote. To some NetMD is worthless because the quality is incapable of comparing to digital transfers into SP because one is only able to convert MP3s to ATRAC equivalents in sound quality of LP2 or LP4, so even though it will convert it to SP, it will sound exactly like LP2.
For me, the LCD makes no difference. For me, NetMD is not an appeal. For me, $100 less for something that offers me no more or less makes the DR7 ideal for me.