I have used both and can say that though similar, I enjoyed using v2 more because ( in part)
it allowed more input / output format support ( including MOD, Mpeg4 and DVD) and more video and audio effects ( and more templates) for DVD authoring.
I must stress I got it as a bundle with Photoshop Elements 4 as a present so I didnt bear the cost.
It is not a "must have" but is better than ver1. I do think its system requirements are more than V1 so look out for that if an upgrade is on your mind.
Im not sure when ver 3 will come as Ver2 really is less than 12 months old and apart from HD support, Im not sure they can improve it much more but.. who knows?
Bottom line? Your call