Mark,
Your models will probably work unchanged, I believe all the component names 2.0 --> 2.1 are the same. So an upgrade install should drop in--although probably cleaner to uninstall, run the ftp site provided ApRegWork cleanup utility and install ArcHydro fresh.
Always hard to get usable details about the structural changes without a lot of reverse engineering and debugging. I prefer to just plug in and go, and fix what breaks. The ArcHydro team at ESRI Water Resources group is pretty responsive to technical questions and bug resolution, they just can't provide a lot of direct user support.
Stuart
p.s. Just tried to upgrade in place from ArcHydro 2.1.0.22 to 2.1.0.40 and the installer balked at the upgrade wanting me to use add/remove programs to uninstall. Could swear I've done in place before, so maybe a new twist in the installation packages.