Yeah, that's kind of the point of the KOTOR/TOR universe... It's Star Wars that people love, but in a time that avoids the problems the game faces while trying to make it what the fans want.
For instance, Star Wars Galaxies (the first MMORPG for SW) came out, and it was a cool enough concept except that everyone wanted to become a saber-wielding Jedi or Sith type guy, and tons of people were acheiving it... All well and good except the game was set in the Original Trilogy timeline.
Like Lando mentioned, the original KOTOR was "original", but you had obvious tie-ins to the things that make Star Wars what it is, so people actually were interested in it who liked Star Wars. And it fit with other EU things too... The Millenium Falcon-ish ships are just Correllian designs, basically. It's in a lot of EU at this point that Correllian Engineering Corportation has been around the galaxy for eons, and the "disc" is kind of their trademark for small fast ships. The Falcon itself is even pretty old, ultimately, and just part of a long series of vehicles with similar design elements. I like to think of it like a Mustang... Around a long time, lots of different changes, but fundamentally the same or similar.
The troopers are weird... TOR appears to be showing an evolution in the armor that the Republic/main government uses. It's clearly bulkier compared to Clone armor in the PT, which obviously shows some evolution compared to the Stormtroopers... I can buy that KOTOR Republic Troopers and TOR Troopers exist at the same time though, despite the style differences. I'd gladly take both styles from both games (I've wanted KOTOR Sith and Republic Troopers for ages) though.
The SIth armor's a big difference though, at least from what we've seen so far of Sith Troopers in TOR compared to KOTOR. There's always some excuse you can BS though.
For what TOR is doing, or at least what they show off anyway, I'm always impressed... To the point I'd fully support a line of figures strictly for the game, so long as they're to-scale with what we currently have. The game's basic formula though, is to give people the Star Wars experience they want without the hinderence of there supposedly only being a couple Jedi left in the galaxy, and Vader/Palpatine are the only bad Sithy people, and the movie's relatively strict plot. For the growth of MMORPG's it's really a rock and a hard place for them to have to try to fit into that mold it seems. The Old Republic Era really lets the writers let loose though.
The other option is the distant future era, I guess, as far as a looser control for the gamers... That era seems to be pretty uninteresting to a lot of folks though, so I'm glad they went back to what worked (KOTOR) instead of trying to go into something like the Legacy Era with Luke's grandkid or whatever.