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First generation computers used vacuum tubes to carry data in form of electronic signals. There were very large ,expensive and they required huge amount of electricity.
For example the ENIAC (electronic, numerical integrator and calculator) was a first generation computer. Link text -
This computers used transistors instead of vacuum tubes. Because of this were more small computers became much smaller in size and also become faster and cheaper. Link text
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Integrated circuit were introduced during this generation they are like a transistors but it can work as fast as thousands of them. They also become faster, cheaper and smaller than second generation computers.
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They use micro processors. They consiste of small silicon chips with thousands of circuits. They also are smaller, cheaper and portable. They used less electricity and they produced less heat.
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This are the most advanced computers. Scientist are developing artificial intelligence that they can think by their owns.