I haven't played it a whole lot yet, but it's damn good so far. I really didn't play the first one very much, so I can't compare very well other than to say that the graphics have improved. The damage model is pretty cool on heavy damage. I actually lost a wheel on one race. I was still able to finish the race, but the handling was horrendous, so it's not overly realistic. It is a VERY nice looking game, convincing enough to occasionally forget that you're not actually driving. The new interior view is pretty convincing even if there is no dash displayed. It kind of fools your brain a little bit into believing that you're actually doing crazy stuff like going 120 down narrow, muddy country roads, etc. There are a ton of tracks, and it looks like the career mode will take a while to get through. I'm looking forward to taking it online which I'm sure will be crazy with voice, especially since, apparently, it's best played with only a few other people.
Also, I haven't tried tweaking the car any, I've been too busy trying out all the tracks, and reveling in the new interior view.
Lastly, to anyone in the area, Toys 'R' Us in Ontario, California is great about having a ton of titles in stock on release days. I got Ninja Gaiden and RSC 2 there when NO ONE in the area had either, and these guys had a dozen in stock, so... just dont buy mine.