Is the generation 2 that much faster than generation 1

The CPU is the same, just the v2 has more memory. I don't have a v1, but based on the youtube vids I watched, my v2 is not faster.
 
Theoretically, more available memory is noticeable under conditions where more background services are simultaneously running. It means more things are allowed to stay in memory without being killed. Without working Adobe Flash, it is not really useful in some scenarios because of how memory efficient Android is. A RAM module costs something in the neighborhood of 5-10USD though, so it is a worthy investment. That's just not how the generation 2 is marketed with most vendors, however.
 
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