The only real difference I remember from the XBLA version of Kazooie is how it handles musical note collection. In the N64 version, all 100 notes in a level are reset if you die or exit the level. Only your highest "note score" in a single run through a level counts toward your total note count. The XBLA version allows for each note to be permanently collected. I think it does the same with jinjos. It just makes collecting them a bit less tedious (there's nothing quite like slipping and falling to your death in Rusty Bucket Bay's engine room after collecting over ninety notes), though I can see how some people would see this as dumbing things down.
And liking Tooie more than Kazooie is a pretty common opinion. The worlds are bigger and interconnected with each other, the split-up mechanic adds to the gameplay variety, and the humor is a lot darker. I still prefer Kazooie overall, since Tooie relies a bit too much on mini-games, is a little too big for its own good, and takes a bit too long to get anything done. Both are still solid and worth playing. They're collect-a-thons done right.