Not quite sure what you mean by making use of the game engine, but Assassin's Creed II was a phenomenal improvement on AC1. The cities are larger and more detailed (you get to explore Venice!) and there's just more...everything. More side missions, more weapons, more sandboxiness, and most importantly more characters and more personality. If you felt like Altair was a bit bland, then you'll most definitely enjoy Ezio's charm. They took pretty much every complaint AC1 had into account and fixed it.

I think they must have done a lot of research when designing the cities, because when we showed Venice to my boyfriend's grandfather he recognized several locations.