Though it's improved in a few major areas, they managed to mess up the most important aspect of the series. The story...
Gameplay
Lets get down to the meat and potatoes. Story-wise, it's a significant decline from both the first Xenosaga and especially Xenogears. They basically butchered the creators of Xenogears and the first Xenosaga's work. Anyway...The anti gnosis weapon systems (Giant robots of the first Xenosaga) have been upgraded. The new ones are both more effective in combat and much better looking. The battle system has been revamped. Some may find it a bit complicated. I have to admit...even I was a little lost at first. Certain combos can either thrust your opponent into the air or knock them to the ground, which makes them a whole lot more vulnerable to your attacks for a single turn, unless you boost with another character, in which case, the enemy stays in the air or on the ground until you run out of boosts to use. The hard part is figuring out which combination they're weak against so you can knock them into the air or on their ***. There's one major sidequest (Something the first game failed to give us) called the Global Samaritan Campaign. It's basically just a laundry list of about 27 different tasks that you have to complete. In return, you get rare items, techniques, the satisfaction of helping someone in need, etc. You get the idea. So while the story took a definite hit, I believe the Gameplay was actually enhanced a bit from the first game. One plus is that they managed to retain the difficulty factor that I loved about the first game. You just don't play many challenging games nowadays, but the two Xenosagas are exceptions. Especially for the role playing genre.
Visuals
Many fans of the first game were disappointed by the decision to go in a more realistic direction for the second game. I personally wasn't though. The characters still look more fantasy than real. It's just that a lot of the first Xenosaga's fans were anime addicts, so the decision to get rid of those huge anime eyes was like ripping their poor little hearts right out from their chests. Get over it. The visuals looked much better this time around. It was nice to see Jr get a decent outfit. He just looked odd in the first game. I actually thought he was pretty stylin' in this one. MOMO has a nice new beret. Aww..how cute. KOS-MOS looks much better, as does Chaos. The world? Much better as well. So on the visual front, it's definitely an upgrade from its predecessor.
Sound
In this department, it's definitely a downgrade. Don't get me wrong. Yuki Kajiuri (Or whatever her name is) did an excellent job. It's just that she had some large shoes to fill. Yasunori Mitsuda's probably the best composer in the video game industry today and though she did quite well, it was an uphill struggle for her. She's definitely got a much different style than Mitsuda. Who knows? You may even prefer her wok over Mitsuda's. Not likely...but possible. I personally thought the voice-acting was much improved, but many fans of the first game were disappointed, so I don't know.
Value
It doesn't have much replay value in my opinion. One time through and I was done with it for good. Maybe I'll go back and play it again sometime in future, but the desire to's just not there for me now. If you can pay anything under $30 for the game (Which you should be able to) it's worth it...assuming you're a fan of the genre.