The most noticeable difference is that the powerzoom system had taken away the zoom ring and manual focus ring, using electronic or electrical means to achieve the previously mentioned two features. This would reduce the size of the lens tremendously.
(Courtesy of
Panasonic Lumix G X 14-42mm PZ Lens Review)
Another thing was that the lens was virtually silent, thus very good for movie (I have not use the Pany 14-42mm kit lens before so I cannot verify this point). The next thing is the smoothness of the powerzoom lens when it zoom in and out during movie mode, which is claimed to be smoother than normal mechanical zoom ring of the kit lens.
And for people who are used to PnS cameras, this lens would be very much appreciated because the function are very similar to PnS camera zoom in and out fuction.