This model was introduced in 1987, and marked a major difference in the philosophy of these models: this was the very first slot-expandable compact Mac, which allowed many new features, such as video-out capabilities, Ethernet cards, ... It was also the very first Mac with ADB (Apple Desktop Bus), a specific bus for connecting various peripherals (keyboards, mice, graphic tablets...) which lasted well up to the PowerBook G4 (they had internal ADB connections for the trackpad and keyboard).
As for the hardware, it remained pretty similar to the one in the Plus (and eventually the 128/512k): the same MC68000 was still powering the system, however it was now possible to upgrade the memory up to 4 MB, and you could opt out for either a 2x800k floppy drive or a single 800k floppy+40 MB hard drive configuration.
My unit is the dual-floppy model, however one of its floppy drives was replaced with a Cirrus 20 MB HD. There was a big stripe of duck tape across the floppy slot, in order to prevent people from inserting floppies in the slot where the hard drive was placed (this was, according to the software installed, a lab computer, where students could work on their projects - a lot of development and office software was installed in it).
This machine is still in terrific condition, given its age: its capacitors seem to be OK (sound is good, there is no Simasi and no wobbly screen!). The only issue I noticed was that the internal floppy drive seems to be jammed, and won't allow the insertion of floppies. Fortunately I have an external drive (which works in every Mac with the external floppy connector - 128k, 512k, Plus, SE, SE/30...), so I can actually exchange data with this machine.