In my mind one of the primary benefits of R over Matlab are the 'data frame' data structure and the ecosystem that's built up around that, for slicing/dicing/plotting/modeling/etc. Also, having factors as first-class citizens is super nice.

The biggest benefit of R is a huge set of statistical libraries. If there is any sort of stats function you might want, it is available in R.

The other benefit R has is the incredibly productive and thoughtful Hadley Wickham. He's completely changed the way I write R over the last five years, and I'm a great deal more productive as a result (as is my code).

R's Scheme-like lexical scoping, lazy evaluation, and reflective abilities make it very extensible if you know what you are doing.