The Note 2 is a huge leap over the Note 1 in terms of the processor, RAM, S-Pen, Touchscreen pressure system/sensitivity and screen quality (they improved the pixel matrix). They also increased the battery size from 2500mAh to 3100mAh.
You guys HAVE to watch this:
[GALAXY Note II] First Hands-on Video - YouTube
Thought this was a neat spec sheet:
You guys HAVE to watch this:
[GALAXY Note II] First Hands-on Video - YouTube
Thought this was a neat spec sheet: