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The ads say it has improved software/GUI and more traffic functions.
One key difference is that with an N1 you can ground the handbrake wire and that allows you to bypass the interlock which only lets you play DVDs and replan the navigation route when the handbrake is on. With the N2 thats in the software and senses when the vehicle is moving.
Up until I drove my "new" Vette from Charlotte to Chicago recently, I had never used a NAV System. The unit we used was a Garmin portable unit (http://www.garmin.com/products/sp2650/) which I thought was more than adequate--you might want to check it out.