Before ADO 2.0, you were limited in what you could do using the default DataFactory object provided by Remote Data Service. Essentially all the DataFactory could do was make the specified connection to a data source and execute the specified command.
With this release, an extension, or handler, can override the default DataFactory connection or command with parameters supplied in a customization file. In addition, the ability of an administrator or guest to read or write data is governed by access rights. You can also design your own custom business objects to use a handler.