Expression Encoder 2 offers some significant advantages over the first version. The new functionality of the "Overlay" feature is pretty spectacular.. You can import many different video formats, and some new ones for overlay that were not expected..

The exciting thing is you can now import .xaml files into your media which can include full screen animation overlays and more. So for instance you could take a logo you did in Expression Design and animated in Blend and add that into your video. You can tell Expression Encoder how long that it will be onscreen from the timeline and it can span over an entire project with multiple clips if you like as well.. Here's an example I did of the XAML version of the Designing for Dot Net logo, imported into Expression Encoder 2, note you can set placement, sizing and cropping of the  overlay at will with the green design rectangle handles.

This means you can add a lot  of really great special effects to your encoded videos.. You can also make an overlay do picture-in-picture video..

Here are two videos back-to-back from the encoder preview..

Anyway that's just some of the new features, you can easily attach leaders, trailers, and the post-production support for tweaking and editing is really wonderful..

XAML support gives you great abilities to do some very cool things with masking and alpha channel that haven't been available before for overlay and turns Encoder into a special effects box.