The Difference are:
1. The mother boards/chip-sets are from different modeling
2. DVR8504 has DVR burner option, DVR204 doesn't have
3. DVR8504 has 4 audio channels, DVR204 has only 1 audio
4. DVR8504 has more alarm ports, DVR 204 has much less
5. DVR8504 has CMS (content management software), Means if you have many different this model DVR in different locations, you can use the same software to monitor all of them.