With Blogging becoming more and more popular, Content syndication has become more popular then ever, allowing people to be constantly aware about any updates on their favorite websites and blogs.

A persistent problem for Syndication standards is the existence of two feed formats: RSS & Atom, more specifically RSS 2.0 and Atom 1.0

RSS 2.0:

RSS 2.0 is the most widely used format in the Feed Syndication industry, it’s copyrighted by Harvard University, and enjoys support from big company names such as Yahoo and Microsoft, plus it’s the format used by Wordpress witch helped RSS 2.0 gain much of it’s popularity in the blogosphere.

Although, being the industry leading standard, RSS 2.0 has many shortcomings. One of the most noticeable downfall of using this format, is what became known as tag soup. The term refers to RSS 2.0 incorrect usage of markup (for example, the string “AT&T” would be expressed as AT&T).
In a addition, RSS 2.0 lacks any support for XML parsing, witch means lack of support for any structured data syndication. (For example, syndicating products, Geospacial data).
Most Browsers have added support for RSS 2.0.

Atom 1.0

Atom 1.0 represents the consensus of the Atompub Working Group within the IETF. This format has provided some very advanced solutions to problems found in RSS 2.0, most noticeably it’s support to different type of data, in response to the RSS 2.0 limited support to “plain text”. With Atom 1.0, content must be explicitly labeled as one of:
-plain text, with no markup (the default)
-escaped HTML, as commonly used with RSS 2.0
-well-formed XHTML markup
-some other XML vocabulary
-base64-encoded binary content
-a pointer to Web content not included in the feed

Another advantage in using Atom is the “updated” field, witch notifies users when old content has been modified.

Microsoft latest Internet explorer release IE 7 does not support the MIME type: application/xhtml+xml, witch in plain English signifies that IE 7 does not support Atom, but works fine with RSS.
Atom is heavily supported by Google, and has been widely adopted by Blogger. At this point in time, Atom control a small part of the industry but with Google acquisition of Feedburner and the launch of it’s sophisticated Google Reader, Atom 1.0 has a real chance of dominating the market share and establishing itself as the industry standard

Sources:

Comparing RSS 2.0 and ATOM - For the Rest of Us!
Rss 2.0 And Atom 1.0 Compared
RSS vs. Atom: What’s the Big Deal
On RSS and Atom