John, It was quite a while ago when I upgraded to Photoshop CS2. I have CS3 now and highly recommend it just for the way it processes panoramas.
However, back to your question...
The biggest changes that I remember were that Bridge (the file manager part of Photoshop) went to a stand-alone program and became a whole lot more powerful and much easier to customize for the way you want to work.
The other big improvement was the raw converter (Camera Raw.) With CS2, I was finally able to stop using other raw converters and rely on Photoshop. Okay, well maybe I still use Capture One sometimes (even with CS3's raw converter), but most of the time I can rely on Photoshop.
If I remember correctly, there's also more batch processing capability with CS2.
That was just too long ago for me to remember much...
I do remember that there was a huge step change in going to CS2. It wasn't a trivial upgrade.
Hope this helps some...
