DataFrames impose just a bit more structure: we assume that you have a tabular schema, named fields with types, etc. Given this assumption, Spark can optimize a lot of internal execution details, and also provide slicker API's to users. It turns out that a huge fraction of Spark workloads fall into this model, especially since we support complex types and nested structures.
Is the core RDD API going anywhere? Nope - not any time soon. Sometimes it really is necessary to drop into that lower level API. But I do anticipate that within a year or two most Spark applications will let DataFrames do the heavy lifting.
In fact, DataFrames and RDDs are completely inter-operable, either can be converted to the other. This means that even if you don't want to use DataFrames you can benefit from all of the cool input/output capabilities they have, even just to create regular old RDDs.
The first step of all my Spark tasks is "turn this RDD[String] into an RDD of parsed JSON", or turning CSV into case classes.
What JSON parser will dataframes be using? I presume Jackson?