Also posted this in the QuakeCon thread, but I'll add it here too:
TWO WORLDS II:
-Deeper character customization [wasn't show off in the demo though]
-More generic wildlife [the savanna in the demo had leopards, ostriches, and rhinos]
-Spells are created through cards [combine fire card with missile cards creates fireball spell, but there are also secondary effects that can be added on]
-Weapons and armor are upgradeable [stackable system is replaced with the ability to break down armor and weapons into their key components for use in upgraded existing weapons and armor]
-Animations looks much smoother, big improvements over the original
-Several different varieties of travel exist [one is a sailboat that you can actually sail yourself, as in controlling the sail and rudder]
-Main storyline is 20-30 hours, but there are tons of sidequests
-Multiplayer is revamped and much deeper [the multiplayer actually covers the seven years between the original game and its sequel]
-Herbs and misc. animal items can be combined to create different potions, each combination will result in a recipe that will show you how to make it again [think this was in the original]
-No skill trees, all individual skills are available to add points to depending on how you want to play.
-Armor sets can be tied to a single button, making it much easier to switch between ranged, close-range, and magical focuses
-Didn't get to see dialog and voice acting in action, but considering how much everything else has been improved I would be very surprised if this didn't get fixed as well
-Combat feels much deeper with a variety of different attacks depending on how your character is moving
Looks like a major improvement over the original.