Fission versus Oil/Gas. Makes TOTAL sense to use fission but politics is trying to kill that technology.
Microsoft vs every other desktop operating system
Cisco versus all other routers. The Juniper killer switch/router should be out later this year.
Internal combustion engines versus advanced steam power (external combustion).
The internal combustion engine is insanely complicated versus a decent steam engine. Using steam engines would have also made every single engine a multi-fuel drinker. The drawback? It takes 30 seconds to start (and heat) the car versus about 4)
Zepplins versus airlines.
Orion drives or laser launch versus chemical rockets is a good example of a superior technology losing to a more primitive one.
http://www.rmi.org/sitepages/pid456.php
External-Combustion Engine
External-combustion engines include steam engines and Stirling-cycle engines. Stirling engines may be a promising technology for HypercarSM vehicles. They burn their fuel in a single chamber or furnace, with the heat from this combustion driving the pistons up and down in their cylinders to rotate the crankshaft. This arrangement allows for increased efficiency over internal-combustion engines because the combustion takes place continuously, instead of in a series of explosions (which inevitably leave more unburned fuel). Efficiencies of up to 60 percent are theoretically possible, compared to 45 percent for diesel engines and not much more than 30 percent for standard Otto engines.
Although Stirling engines haven't yet been used in any production vehicles, most early problems of bulk and reliability appear to have been ironed out, and current prototypes offer the prospect of lower mass, fewer parts, less noise, and much lower emissions than diesel counterparts
http://www.howstuffworks.com/engine1.htm
There is such a thing as an external combustion engine. A steam engine in old-fashioned trains and steam boats is the best example of an external combustion engine. The fuel (coal, wood, oil, whatever) in a steam engine burns outside the engine to create steam, and the steam creates motion inside the engine. It turns out internal combustion is a lot more efficient (takes less fuel per mile) than external combustion, plus an internal combustion engine is a lot smaller than an equivalent external combustion engine. This explains why we don't see any cars from Ford and GM using steam engines.
It seems to have to do with where the combustion takes place relative to the engine. All engines must be open to the outside at least part of the time, or else they would explode.