The Teleread site carried a brief assessment of K2, including several user comments, and also repeated the press release. The MobileRead Forums also gave it some coverage. For more specific info on what K2 can do, check out the User Guide. I did, and it seems to me that the differences are (in addition to above new features):
The wireless on/off mode is now controlled by menu, not a physical switch
Sleep mode is turned on and off with the power switch
You can list only "personal documents" (not clear if free ebooks count as personal documents)
You can zoom on images in a book
Highlighting function underlines instead of drawing a box
Web browser looks at least slightly easier
On the other hand, I didn't see anything about installing an SD card or changing the battery. Marketing people never let the folks who write documentation say anything negative, so it's hard to know if that's covered elsewhere or merely no longer available.
Also note that the Amazon Kindle order page says that if you ordered a Kindle 1, you will automatically get a Kindle 2 instead, no action needed. That's not strictly true if you want a cover for your new Kindle (I recommend it!) as that now must be ordered separately.
Addendum: The user guide lists this included feature: "Power — AC power adapter and replaceable [emphasis added], rechargeable lithium polymer battery." However, neither the user guide nor the Quick Start Guide tell you how to replace the battery.
Addendum 2: Amazon has upgraded the Kindle 1 to have two of the new features! I can now zoom in on images, and the menu option that used to say "Check for new items" now says "Sync & and check for items." I didn't mentioning the syncing features but it appears that Amazon is keeping track of where you are in a book, in case you are reading it on more than one Kindle at a time. Not nearly as useful as zooming, but it's nice they thought of us Kindle 1 owners for this.