Xenosaga II was only slightly better than the first game, but that doesn't say a whole lot about the series.
Xenosaga II is a turn-based RPG. You can only battle with 3 characters at time, and cannot summon Mechs to help in battle this time around. In battle you can only use 4 different attack combos, but Shion and MoMo can only use 1 attack. The way the combat the lack of combos and attacks is by using "stock". Each character has 3 slots under their HP info, and during one of your characters turn he can "stock" up by skipping their turn. The stocks add extra moves to your already existing combos, and make for powerful attacks. On the status wheel in this game, you can gain an instant boost if you land on it. So between the stocking and easy boosting this can make for quicker battles depending on how you play.
Mech battles are separate battles and you need use 2 characters per Mech. You can only battle with 2 Mechs at a time and cannot use Items during battle. Mechs only have 2 optional attacks, but they can also "stock" up for special attacks, otherwise it's the same as fighting with characters.
You don't equip weapons or even gain money in this game, that's mostly a downgrade, but the weapons in the first game was so boring to deal with I think this was for the best. Not gaining money however is ridiculous and because of that there's no shops to buy items (although I rarely needed them). A good thing about the lack of items was the ability to revive ones magic by putting them in the reserve, so you can use your reserve characters after a battle to heal your fighting characters without wasting items at all.
The skill system is much better, but it can be worse in some areas because everyone learns the same exact skills, and the characters you don't use won't gain any skill points. I pretty much played this game with the same 3 characters all the way through (I did the same thing in Baten Kaitos and the first Xenosaga aswell). Anyways, there's 4 class levels, each level have around 8 sub-levels, within each sub-level there is 4 skills you can learn. Before you go off buying skills, you first have to purchase a sub-level with Class Points. You gain Class points only by defeating bosses, using items that give you CP, completing a class sub-level and a few select random encounters, in other words, gaining Class points is rare. Once you unlocked that sub-level, you can then start using the skill points you gained from battles. If you gain enough, then you'll unlock the next level of Classes. I only uses Shion, Kos-Mos and Jr for most of the game and only got about 2 and half skill levels completed, so there was alot of unreachable stuff to get unless you power leveled your way to them.
You can gain three types of skills, a magic ether skill to use in or out of battle, an equipable status skill and a permanent status skill (my favorite). The status skills are the only thing you can you equip and change around game, so there's alot less micro-managing in the game and I like that.
The dungeons are about the same, but possibly longer. In each dungeon you'll encounter puzzles, so that right there makes this a much better game than the first.
Xenosaga II brings back the 18 decoder / red door sidequests from the previous Xenosaga, and adds 36 new sidequests. These new sidequests can be either extremely simple or extremely hard, but most of them are fetch missions that require you to run around talking to random people with little advice who to talk to. There's also hidden bosses and other sidequests that make this game slightly bigger and more fun than the other game.
----------Characters / Story----------
You play as Shion again, and you're once again trying to find the answers left in the first game, like what are the Zohars, and where is old Miltia, blah blah blah. All of this 'current' story was pretty forgettable, actually the main storyline in this game is the backstory between Jr. and Albedo. I loved all the backstory moments of the game, and it all made sense towards the end. Everything about the storyline was more interesting than the first game.
The graphics have been touched up quite a bit since the first game (and it should, duh). The character models are alot crisper, more detailed. The towns and dungeons are HUGE, although only in appearance. Walking around is still pretty restricting. The only downgrade I can think about is the normal attacks are extremely weak to watch, everything but the Mech's special attacks are minimalized. The best thing about Xenosaga II is the awesome cutscenes of course, and they're alot more exciting to watch than the first one. There's alot more action packed scenes in this game, not just a bunch of people standing around computer monitors talking to each other.
The music is better, but I have mixed reactions with the voice work. While all the voice work is much better acted out, they changed a few of the actors and that's a little distracting. Chaos is is easily the biggest difference between all the characters, but I think it's an improvement, he still talks in a low-effeminent voice, it's not quite as over board this time around.
The world map is pretty much the same as the previous Xenosaga game. Depending on the storyline, you'll either be warped to your next destination or you have to ride on Elsa to it. You can't backtrack to most areas, but like before you can "simulate" previous areas with a with a E.V.S. point. During breaks between cutscenes and dungeons you can venture off on your own to walk around the Foundation, and a new bigger area of Second Miltia. When you get to the only actual "world map" on the game, you walk over a map with icons, walking across a narrow trail to each section of the map, similar to the first game and the Baten Kaitos games. The world in this game is about two or three times the size of the original Xenosaga, and while it still makes this game extremely linear, it's still a big improvement.
----------Time to Complete Game----------
After I beat the game and the credits started to roll, I was like, "Is that IT???". Well, after you "finish" the game you can save your data and re-start at the Elsa, where you can take on new sidequests and finish all previous sidequests you didn't get to tackle. While my overall time is alot less than my time over the first game, I had to level grind alot in the first game, never once in this one. Also this game has a ton more sidequests I didn't even tap into yet, so this game is a much bigger game overall.