There's a difference between bigger and better
First of all, it's still Fallout. Everything that was great about the first one is present in the sequel as well, from the brilliant SPECIAL system to the overall feel of exploring a gritty, dirty and cruel world without any hope of it getting better anytime soon. And it's all just as great as it used to be, even with some minor tweaks of the interface (like the very useful "take all" button when searching containers).
There are already very comprehensive reviews stating why is it so good here on MobyGames (Zovni's, Unicorn Lynx's), so I won't go any further into that. Let me just say that I do love the first Fallout and large parts of Fallout 2. But there are flaws in the sequel, oh yes, and quite a lot of them.
It's much larger than Fallout. That sounds like a good thing, given Fallout was one of the best games ever and so on. But there's a problem with that, an unheard of problem with a video game - it is simply TOO large.
So large, actually, that toward the end of the game, whenever anyone mentioned one of the locations I've already visited, it took quite a lot of effort to remember which one it was. Probably because so many locations had to be designed, they no longer have the delicately crafted feel they had in F1 and are, therefore, much less memorable (and, of course, some of the locations of F2 are simply bigger versions of F1 locations). As a consequence, the whole 'what happened next' sequence after the endgame (just like in F1) is very, very long and informs about cities and people I didn't really care about in the first place. Exploring the world toward the end of the game became a very tedious experience, because every location is more or less the same and the ending is nowhere in sight.
Interestingly, even the least interesting parts of Fallout were blown up to much larger scale. Remember the first fight in Fallout, with the rats? Not that much fun, was it? Well in Fallout 2, there's a whole 'Temple of Trials', teeming with such exciting foes as large ants and small scorpions, and when you finally finish it, you reach the lovely town of Klamath where you get to enter the sewer system and fight three times more rats than in the whole of Fallout! Hooray!
Contributing to this is the fact that the SPECIAL system remained virtually unchanged. That also sounds like a good thing, because the system was ingenious, but it was designed for Fallout and Fallout was designed for this system. At the end of F1, your character was typically somewhere around level 21 (this is a rough guess, I can't remember the exact number and it's not important) and he/she was an unstoppable powerhouse. In F2, your character reaches level 21 towards the second third of the game and is a (slightly weaker) unstoppable powerhouse. And the enemies are not much stronger than in F1, can't be, really, if you want the game to be more or less realistic, because there are no more supermutants, just humans in good armor. The result? All the battles in the later parts of the game are extremely easy and the final boss' stats are sky-high (and not realistic at all, I should say).
There is another huge issue with F2 and that is humor. Of course there were moments in the first Fallout that were funny, but it never distracted from the atmosphere. With F2, someone decided to throw in as many jokes and pop-culture references the designers could think of - which went way over their heads in the special encounters -, and what's much worse, the humor became much more stupid, including scatological humor (blow up the toilet and see the whole town covered in feces! how hilarious!) and incredible amounts of sex jokes (including the infamous 'become a pornography actor / actress' scene and the 'shotgun wedding', available in gay, lesbian and heterosexual flavors). One of the nice things about F1 was its maturity and how it presented sex as something that happens now and then between people. Fallout 2 treats sex as a teenage boy desperate to get laid. A major disappointment. And there's also Myron, a character who was apparently supposed to be the source of comic relief and the designers spent quite a lot of time on him, but a) he sucks in combat and b) he is not funny, so there's absolutely no reason to have him in your party. Talk about wasted effort.
Talking of NPC party members - yes, the game engine was vastly improved there (simply because it was by far the weakest point of F1), but they are all still next to useless and it is possible, better, even, to play entirely without them. They are only good to carry items and who needs that many items, anyway?
There are also issues with the story elements - supermutants of F1 were cheesy, but acceptable. In F2, you have, among other things, the 'aliens', who are obviously inspired by the Giger monster and probably came from outer space (what the heck? I know this is sci-fi, but not *that* kind of sci-fi!). And the whole story arc, revealed only at the very end, is simply idiotic, with a twist explaining the secret purpose of the 'vaults', which I really, really hate, because it is exceedingly stupid, it corrupts even the story of the first Fallout and... let's just pretend we never heard of it, shall we?
There are also some smaller issues, like insane save/load times on the computers of that time (that was also bad in Fallout, but more locations in F2 meant that on my P166, the load times toward the end were somewhere around 90 seconds and no quicksave / quickload) - not a problem anymore thanks to more powerful PCs; bugs galore (I never finished the game in my first try, because at the final location, it kept crashing to desktop every five minutes and with the already mentioned load times... you get the idea) and some balance issues (my character was an unarmed expert, killing even the toughest opponents in one hit, but when fighting the final boss, she could hardly bruise him, so I had to resort to the non-combat way of dealing with him).
The Bottom Line
Many people love Fallout 2, because it is gigantic and allows them to do much more than Fallout did, while still retaining everything that made the original one of the finest games ever crafted. I've had a lot of fun with Fallout 2, but I suppose it pales when compared to the times Fallout 2 annoyed me and bored me with its sheer size. It is not a bad game, but it is just a teenage, less smart brother of a mature genius.