mmm talk about a complicated question... where do I start? This is only my perception, which means it can be flawed, but try this then...
Can someone explain the differences between 1.9 and 2x for me?
The differences are huge. From the beginning of development of v2, security was uppermost and everything has been built around security. This required huge changes in the database, the moodledata folder, backup/restore and other areas. This also required some complicated changes to the way in which Moodle runs, how we build courses and so on. The "Coding Cascade Effect", if you like, change one thing and everything changes around it and those changes can, and did, escalate. This creates a whole new set of problems most of which need to be exposed when it is actually in use, and some that are exposed only when in use. This necessitates a new approach and a cautious approach by many institutes, which segues into the next aspect of your question.
I am curious as to why so many Moodle users have yet to upgrade to 2x, and even more still are downloading 1.9 when 2.0 already exists.
When v2 was released there was huge debate about it, as there should be, and one perceptive comment was that it would be 12 to 18 mothns before major institutes started using it to get through the bug fixes so we cannot reasonably expect to be in large use before then. We must also accept that the majority of those academic institutes are in the northern hemisphere and are reluctant to change their tools in the middle of their academic year and the 18 month period is just coming up now. Many larger Moodle users have already indicated they are changing over in your summer, 6 months away. Where I live, my employer went to v2 about a week ago, it is our summer, when students were on holidays and there seems to be no initial issues. I expect other southern hemisphere users would have done so as well, or perhaps they will wait until next summer.
Most of those downloads would be people upgrading their v1.9 and people who are, like yourself, using something they are more familiar with, biding their time until the "untried" v2 is more ready, I suggest. I am not surprised, really, the sales takeup of any new product is always problematic. We cannot use anything from the Dark Side as a guide, Microsoft cease production and release of older version products when they release new ones there is no parallel marketing. Martin did say, from the start, that support for v1.9 would continue for a while, but eventually come to an end.
Moodle.org, traditionally, supports older products, not so much with major fixes or coding change, but with security updates. Adaptations of older Moodles, in some areas, have been critical to the evolution of Moodle and the upgrade path has been specific. You would not be able to upgrade from v1.4 to v1.9 for example without the intervening steps. This is why legacy Moodle versions have been supported. I suspect the code base, the database, the coding practices between v1.9 and v2 are too different, so I expect that all support for any v1.x version will cease altogether soonish, perhaps before the year is out, and I would think so. Be a very inefficient utilization of resources to continue support for a product that is superceded by something that is evolving faster into a vastly superior product.
Upgrade whenever you feel the timing is right for you and your enterprise, but planning for it should be undertaken long before doing it. If you are upgrading, then make sure the block and filters you use are supported in v2, few non-core blocks have been updated. Make sure you test everything, backup everything, before you commit an upgrade to your production site. Practice it on your test site first, several times. Make sure your course creators and teachers are familiar with it before you upgrade by installing a test Moodle they can practice with.
Anyway, that is my view, right or wrong. Cheers..