SOOOOO much better than the original.
This should be its own film and not a sequel to VHS. I watched the original last night and was extremely disappointed. It was extremely bland, cheap, lazy, and felt like a bunch of high school kids made the segments. I really didn't like it. I just finished the sequel and I am really really impressed. It was definitely not perfect, but the quality, the entertainment factor, and the originality (well, at least compared to the first one) was an almost unbelievable improvement over the original.
I'm not the biggest fan of found-footage horror films (some of the Paranormal Activity films had decent moments, but found footage films usually drag up until the last few minutes. The ending of the Blair Witch Project was very creepy, but the rest of the film was somewhat boring.), but I really enjoyed it, and it may be my favorite found footage movie. It's not the scariest, but it was entertaining.