In addition to supporting H.264 source files, TVSuite v4 with H.264 has a new recoding engine which allows you to edit your shows and then output them directly to formats for portable devices like iPods, PSPs, etc... You can also use H.264 output to reduce the size of the files by recording to a lower bitrate or resolution during output saving disc space on a media server.
If you don't need any of those features then TVSuite v3, which is what you're using now, is probably fine.
Right now they are completely separate versions. You can tell which one you're using by clicking Help->About and looking at the version number. If it starts with 3 then you're using TVSuite v3 which does not include H.264 or the recoding. If it starts with 4 then you're using v4 which does include H.264 and recoding.