I'll add my praise here - was going to start a praise thread, but someone beat me to it.
While the story in KotOR was fun and compelling, I feel that this game has taken it to a whole new level. For the first time, whoever wrote the story has managed to make me feel that I can actually change the fate of not just an NPC here and there, but entire planets, and that even the Republic itself might turn in a different direction depending on my actions. How much this is true will have to be seen after I play as a baddie - I'm still doin the nice thing. The baddies are also better - Malak was badass, but was also a bit pathetic, so I didn't really feel he was a threat. These new guys *really* creep me out, though - I rushed through the Harbinger quickly, because I was spooked enough after the FMV that I didn't want to stick around.
The characters and their backstory are incredibly much more compelling than the last one - there have been several moments now that my jaw hit the floor from what they were telling me. Granted, I've mostly seen Atton and Breiya(sp?) fleshed out - this might be what some are complaining about. I haven't finished the game yet, but so far, even WITH the annoying bugs&glitches, I keep playing. My only fear now is that the game will end too soon, and I'll be forced to wait for another year for KotOR3 .....