The main physical (component) difference in the two is the use (in the 23.5) of teflon circuit boards, capacitors, and higher quality resistors and some cabling. Some additional protection circuits, but no real circuit design changes.
The sonic differences are really amazing (I've owned both) and I'll get to that in a minute. But as a guide, most Levinson gear of roughly 1988-1997 vintage underwent these same upgrades:
Amps
20 > 20.5 > 20.6 Class A, 100W monoblock. Runs hot!
23 > 23.5 Class A-B 200W Dual monaural
27 > 27.5 Class A-B 100W Dual monaural
Preamp and Phono preamp
26 > 26-S Preamp
25 > 25-S Phono preamp
Sonically the first in these series were, shall we say, "competant." Good equipment, yes, but not that much different than similarly priced gear of that time, such as Krell, or even Spectral and Goldmund. In fact they sounded a lot like the current Levinson (amps, especially). A little dark, and kind of "clinical" although they avoided that hard SS sound like, for instance Krells and Brystons.
The introduction of the Teflon boards, and other military-specification (mil-spec) components, brought the sound to a whole new level that is even now, almost shocking for SS gear. In fact, it's about as close to tube gear as SS gets, yet with plenty of tight punchy bass that tube gear can't touch.
There is a reason the upgraded versions of these components cost so much more money (retail) than their original versions, and why they are so sought after today. Believe me, the differences are not small.
