As Allen already wrote in a comment, the speaker on the iPad 2 is better than on the iPad 1. To find out just how much better, I put the two side-by-side and played the same song on both, then alternating between them. Above is a video of one of my comparisons (had to find a song YouTube won’t recognize as a copyright violation), so you can hear for yourself. The reason I filmed it was that the stereo mics on my camera are the best microphones I have, and this way you see which iPad is playing- iPad 1 on the left, iPad 2 on the right. Aside from the speaker placement giving you a muffled sound at different positions (iPad 2 when flat, iPad 1 when holding in portrait while resting the bottom on something), the iPad 2 sound quality is significantly better in my opinion. It’s more clear, less tinny- the iPad 1 sounds like you’re listening to a speaker located at the bottom of a tin can. All in all a nice upgrade! I personally don’t often use headphones with the iPad because I already think the speaker is good compared to other portable devices, and this just makes it much better.