The 2 is better but that’s a big price difference so probably not worth it unless you need any of the improvements. Have a look at the spec list:
http://gopro.com/product-comparison-hd-hero2-hd-hero-cameras/
Areas where I could see the 2 is better:
– higher resolution stills (11mpx versus 5mpx)
Not a real advantage in my opinion – 5mpx will print A3 easily and due to the fisheye and framing, cropping anything other than dead centre can look weird
– burst mode and timelapse
Faster on the 2
– better low light performance
Have a look on YouTube for some side by side comparisons
– Full wide angle at 1080p
– compatibility with future updates
Forthcoming WiFi backback claims to only stream with the 2
– Menu System
The menu system on the 2 is much clearer to use
That’s the features that swung it for me, but the price gap was a lot closer when I got mine.