Full story at Kotaku.
Bottom line: Two player, more customization, Camera support, Marketplace downloads, plus an Easy Mode for kids.
This is one of my favorite 360 games, and it's a shame it never really took off. One of the problems with the original is that it's too stressful and chaotic for younger children to enjoy. Two-player and easy modes should make the new game more accessible to the game's target market.
Here are some early screens.

