The new, lush jungle-like setting is much better than the arid deserts of the first and there is the addition of the new water-cooling feature. Using the boost equipped to your vehicle increases the engine heat too. Use it too much, and you explode.
But in the new game, if you drive in water your engine is cooled and you can boost much more than on dry land. Water seems to be featured prominently with water splash on the camera and spectacular jumps through waterfalls.
A much-needed feature shown on the demo is a 2-player mode, letting you race against a friend. In the first Motorstorm you were restriced to 1 player only offline, bringing down the game somewhat.
The video shown on finishing the only track in the demo shows tracks with lava, so maybe you can ride around volcanoes at some point.