The 1998 Furbys are based on a Sunplus SPC81A microcontroller, effectively a reduced version of the 6502. 
It has 80 kilobytes of ROM and 128 bytes of RAM. A significant difference from the original 6502 core is the lack of the Y index register.
The operation of the speech synthesizer chip, Texas Instruments TSP50C04, is very similar to that of those in most electronic devices produced in the 1980s like the Speak and Spell. The same exact speech synthesizer was used in Mr. Potato Head and Monopoly handhelds in 1997, the year before Furbys were first sold in stores.
The codec used is called LPC-10.
There's also a design patent, USD423611S.
At least five different factory codes have been observed on 1998 Furbys.
Model numbers indicate the type of model a Furby is.