Is there a list of changes that making ERC721 become non-fungible token and different from ERC20?
Are there examples of ERC721 contracts?
Is there any drawback of ERC721?
We are still writing the ERC-721 standard. 721 is about deeds. 20 is about tokens. Here is some draft language in the specification that explains the difference
"Deed" word choice
The noun deed is defined in the Oxford Dictionary as:
A legal document that is signed and delivered, especially one regarding the ownership of property or legal rights.
This definition is consistent with the fact that ERC-721 contracts track ownership of other things, such as houses, pictures of kittens or collectable cards. If you gain ownership of a house via ERC-721 then the thing that the ERC-721 contract tracks is the deed, the place where you live is the asset.
Alternatives considered: non-fungible token, title, token, asset, equity, ticket
Regarding "deed" name
@Beskhue, backwards compatibility with existing contracts is not a design goal of this specification. Such is the risk of implementing standards that are not finalized. Please note that ERC-20 was designed as a consensus standard to meet existing implementations, and it suffered accordingly.
I argue that deeds are more general than tokens (and, by extension, NFTs). The word title is probably more correct, but title has other unrelated meanings that are much better known.
CASE STUDY, CRYPTO KITTIES: See the contract KittyOwnership code. In this case, the ownership contract concerns itself with who owns each kitten. This is distinct from the kitten itself. The kitten is defined in struct Kitty. (Warning: the links in this case study are an older version of CK, but they are representative of the actual deployed code.)
CASE STUDY, HOUSES: In most (all?) counties in the United Status, house ownership is recorded by a county deed recorder, the instrument of house ownership is a deed. The deed is distinct from the house. In fact, the house may change, the taxes on the house might change. However the deed is permanent, until it is transferred.
These two case studies illustrate how a deed is separate from the thing which it declares ownership over. In token standards, the token itself is what you have ownership over. In deed standards, you always want ownership of a separate thing. Such is the motivation for the distinct name.
Source: I'm the main author of https://github.com/ethereum/EIPs/pull/841