the m902 has the USB input that Clio09 mentions. The 901 has S/PDIF coax, optical or AES input (it also has both balanced and unbalanced analog inputs, but we're mostly talking about the DAC inside). the DAC on the 901 is "limited" to 24/96, while the DAC inside the m902 can handle 24/192 input. (not something I've had to worry about yet). one thing to note, though, is on the m902, the USB input is limited to 16 bit sources.
As far as quality of the units go, the only other DAC I've compared it do is the benchmark dac1. and my opinions about that are above. I'm hoping to get together with some friends this winter/spring and compare the grace 901 with a bel canto DAC. (we've been lazy, though :) And as far as the analog side of things, it's a wonderful piece of gear. the best headphone amplifier I've heard. (I've listened to many, although never done any head-to-heaad comps). from what I gather, the 901 and the m902 are very similar, if not the same, on the amplifier side of things, while the DAC in the m902 has been improved.