Rather then drag out the old KoTOR thread, I figured it would be better to start a new one for KotOR 2 one and leave the old for discussions on the first game.
I just picked this up the other day(which, incidentially, is why I haven't posted on the forums for a few days)and think it's great. I'm about half way through my third optional planet, playing a male light side Jedi Sentinal/Weapon Master, and his silver lightsabre cuts through almost any foe

Technically, the game is fairly similar to KotOR. The bugs persist, and the menus are a horrible green, but otherwise it's easy to pick up and play.
Now for changes. There are now new feats and powers. New feats include a bunch of blaster feats(such as point blank shot), as well as FP/HP regen and some unarmed fighting feats. New powers can let you deflect blasters without a sabre, or shout your enemies to death, or even the vaunted Battle Meditation itself(and let me tell you, this power is awesome to have). Skills have changed a little as well. The game gives you the ability to craft items at workbenches, and each of you skills(except persuade)aids with the creation of different types of items. This is especially useful at the early stages of the game(if you can't find a vibrosword, you can build one)and in the late stages(where you can make really good items). You can also create stims, medpacks, shields, grenades and whatnot. I'm unsure of the level cap, but I'm level 22 at the moment.
Items wise, the games gotter interesting. There are a lot of new items which make the old weapons and armour appear quite weak. Of special note is items which increase your attributes(STR, DEX, etc). They appear fairly regularly. Implants are now determined by you CON, rather then feats. So, to use a given implant, you need CON of 12, 14, 16 or 18, depending on how good it is. Thirdly is item upgrades. All upgradable items have different slots. For example, vibroblades have the blade, hilt and handle. Unlike the last game, there are many different upgrades which can go into the blade place, each of which have different effects. But, the same upgrade will do the same if placed in any vibroblade. As I mentioned before, if you have the requisit skills and parts, you(or your companions)can build any of the upgrades. Oh, and Jedi Robes have be improoved greatly in this game. Rather then the selection of light, dark, and a few special light aligned ones, there is now a host of robes which have different effects, assuming you can find them. My main complaint is that most swag is generated randomly throughout the game, so sometimes what you're looking for may be a bit hard to find.
Now, on to the story. I'll try to write this out without spoilers. You're character is a Jedi who fought under Reven and Malak as a general in the Mandalorian Wars. But, instead of joining them in their fall, you left after the destruction of Malachore IV and returned to the Jedi Counsel for judgement. You were banished, and hence you are refered to as "The Exile". So, the Exile became comepletely cut off for the force and has been cruising around the galaxy for the last few years trying to keep out of sight. In that time things haven't been great. The Republic is trying to rebuild after the Jedi Civil Wars(Reven and Malak's attack in the first game), and the Jedi have vanished, leaving the Exile the last one left. And as such, he/she is now the target of not only Sith assasins, but also bounty hunters for the Exchange.
To my mind, the plot seems to tie in with the first game quite well. Early in the game you get to report on you're view on Reven, to help you're story grow. And the current set up is quite interesting, and I'm eagerly awaiting what happens. The NPC's in the early game tend to annoy me, but you get better ones later on. As for characters from the old game, I've so far seen Bastila, Carth, Canderous, HK-47 and TM-84. They actually have plausible roles, too, rather then the Boba Fett type cameo I was afraid of. Oh, there was a reference to Jolee thrown into the mix for fun, thou I doubt he'll arrive, due to Dark Side reasons from the first game.
Overall, I'm really getting into it, and suggest those of you who liked the first game give it a go.