Microsoft’s Dare Obasanjo has put together a great list of XML related changes between .NET V2 Beta 1 and Beta 2 at http://www.25hoursaday.com/weblog/PermaLink.aspx?guid=f2d229e4-a0f3-4660-aeda-0806c4ace79d.  Some of the highlights include the merging of the XPathEditableNavigator into the XPathNavigator (which was expected), and the removal of XQuery support (although SQL Server 2005 will still have some XQuery support to work with native XML types).  Although removal of XQuery support is a bummer given all of the great things you can do with it, I personally think it’s a good move given the current status of the XQuery spec and the lengthy process it’s going through to get recommended status within the W3C.  I’d rather have classes that adhere to the “official” spec rather than a potential moving target.  Too many maintenance headaches come up down the road otherwise.

Also, for those using XSLT in your apps you might already know that XslTransform was made obsolete in Beta 1.  It was replaced by the XsltCommand class.  In Beta 2 the XsltCommand is being removed from the System.Xml.Query namespace and being renamed to XslCompiledTransform.  This new class will live in the System.Xml.Xsl namespace which will make it that much easier to upgrade existing code.  If you haven’t played around with the XsltCommand class in Beta 1 it is significantly faster than the XslTransform class found in version 1.1 because XsltCommand (again…renamed to XslCompiledTransform in Beta 2) compiles the XSLT into MSIL.