I have both Last Blade 1 and 2 on the Neo-Geo. When i first got Last Blade 2, I was a bit disappointed. The backgrounds didn't seem as good, the music didn't seem as good, and I hated the last boss. However, after putting some serious time into Last Blade 2, I came to like it just as much as Last Blade 1. The biggest plus is the new characters, they are simply awesome. Hibiki anyone?
Everyone complains about the backgrounds in Last Blade 2 which I admit are not as good as the backgrounds found in Last Blade 1. Still, the backgrounds in the game are very well done and better then the backgrounds found in most of the other fighting games on the Neo-Geo. Gameplay wise Last Blade 2 is a bit better then in Last Blade 1, it has a lot of technical things added and is a bit less simplistic. Last Blade 2 also got a major overhaul in the difficulty department; it is much harder and requires a lot more skill to excel at. Note that a EX mode is added which combines both Speed and Power mode which is also a nice plus.
If you are a Last Blade fan like me it is worth owning both games. I love both Last Blade 1 and 2 for different reasons and I play them both a lot. Before I had the NGH version of Last Blade 2 I played the American DC version which is terrible. By all means, if you are going to play Last Blade 2, make sure it is on the Neo-Geo.