I thought the plot behind the villains was much solid than KH1; it was more interesting.
I also loved the improved artwork in KH2; in KH1, the characters often looked like dolls with the mouths painted on. In KH2, their mouths moved accordingly to the words they were speaking, instead of just moving randomly until they were done talking.
Despite the plot (or lack thereof), the Pride Lands was pretty sweet. I hope we get to play Sora as an animal more in the future (and I pray they get better actors as well).
The clothes looked a LOT better.
Although slightly overdone, I loved the reaction commands. Coulda done without the drive forms, though. The limits were pretty neat (gotta love Donald's Fantasia, woulda never beaten Xaldin if it weren't for that).
Although I didn't like the change in Gummi construction, I do like the new Gummi battles; more realistic, interesting and challenging. Never died using the Gummi ship in KH1, but I have in KH2.
The Twilight Thorn, though not as intimidating as Darkside, was more of a challenge, which was nice.
TWTNW was awesome. While it's not as cool as KH1's Hollow Bastion or as creepy as End of the World, TWTNW is kind of like a mixture of the two, a good balance.