IPv4 uses datagram switching at the network layer and is connectionless. It includes fields for identification, flags, fragmentation offset, and time to live. IPv6 was developed to address IPv4's inefficient address space, lack of security, and inability to support real-time audio/video. IPv6 features a larger 128-bit address space, better header format, extensions, flow labeling, and more security. A smooth transition involves dual stack, tunneling, or header translation methods.