As the name of the file in them self suggest:
hadoop-1.2.1.bin.tar.gz -- This contains the Binary or executables (In later releases of hadoop, this is not included for download and need to be built locally using maven)
hadoop-1.2.1.tar.gz -- This contains your src code which is distributed for your reference.
The latest stable release is 2.5.2, it is highly recommended to use the latest release.