This review aims to conduct a comparative analysis of liquid neural networks (LNNs) and traditional recurrent neural networks (RNNs) and their variants, such as long short-term memory networks (LSTMs) and gated recurrent units (GRUs). The core dimensions of the analysis include model accuracy, memory efficiency, and generalization ability. By systematically reviewing existing research, this paper explores the basic principles, mathematical models, key characteristics, and inherent challenges of these neural network architectures in processing sequential data. Research findings reveal that LNN, as an emerging, biologically inspired, continuous-time dynamic neural network, demonstrates significant potential in handling noisy, non-stationary data, and achieving out-of-distribution (OOD) generalization. Additionally, some LNN variants outperform traditional RNN in terms of parameter efficiency and computational speed. However, RNN remains a cornerstone in sequence modeling due to its mature ecosystem and successful applications across various tasks. This review identifies the commonalities and differences between LNNs and RNNs, summarizes their respective shortcomings and challenges, and points out valuable directions for future research, particularly emphasizing the importance of improving the scalability of LNNs to promote their application in broader and more complex scenarios.