Specifications wise, the 4870 and 4850 only differ in one area: core and memory clockspeeds. 750/900 (GDDR5) vs 625/993 (GDDR3). Everything else from transistor count to number of processors remain the same. The reason why the clockspeeds are so much higher for the 4870 is attributed to the default dual-slot cooler it comes with. More details? Check out the review from AnandTech.
It’s not a surprise to see how competitive the 4850 remains. It’s not that the 4870 is slow, it’s actually quite a bargain at $299 — it just doesn’t seem very appealing since the 4850 is so good!