iPad 1 and iPad 2 Specificaitons:
ref: http://www.pinoytutorial.com/techtorial/ipad-1-original-vs-ipad-2-review-of-comparison-and-specs/
According to the spec, there is no doubt that iPad 2 is relatively better than iPad1. It is faster, thinner, lighter and more convenient version of iPad 1. It uses latest Mac OS. iPad 2 has 0.7MP back camera and front VGA camera. I wonder why Apple didn’t integrate better mega-pixel camera. It said it support better internet browsing. However, better processor with faster graphic, it would be a lot better for gaming than iPad1.
According to the spec, there are no eye catching specification. If someone asked me whether they should change from iPad 1 to iPad 2, I would answer by asking a question "for 0.7Mpx camera?" because I can't see any tremendous change in iPad 2. Adding switching cost in consideration, you can simply see there is nothing worth to change.
However, Apple has unique touch ability and brilliant colorful screen that no other product can compete. Apple also have another edge i.e. strong Brand. People think they are sophisticated, trendy, fashionable and stylish when they hold apple product. Moreover, most of the people strongly believe that Apple products have best touch sensitivity. That is why Apple become the top brand when people think about product with touch ability. 
I would say Apple iPad 2 is better product than iPad 1 but still have a lot of room to change to become market leader.
Other tablet overviews:
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