How is Web 2.0 different to Web 1.0?

On the most basic level;
Web 1.0 includes most website in the period between 1994 and 2004.
Web 2.0 is the state of the World Wide Web, following Web 1.0.

However, these differences go far deeper. According to one writer the ten key differences between Web 1.0 and Web 2.0 are:
1. Open standards Base: Ensure service connectivity is reliable
2. Ubiquitious Broadband: The infrastructure is now available to support web 2.0 models.
3. Less investment required: Companies can get far without a massive investment meaning companies can quickly be incubated to spread the risk.
4. Better Browsers: New format support, RSS etc enriches the user experience
5. Powerful development environments: AJAX is young but powerful and holds the promise of being easier to use compared to J2EE
6. Device convergance: Ability to access the web from a multitude of devices means on-demand services are more functional for real everyday use.
7. More Innovation: The de-skilling of the technological requirements mean more people get involved in trying to create, often from a more creative user-base.
8: Change in Use: The focus of the web and web 2.0 is firmly on usefuleness and in many cases commercial basis.
9. Maturity: Resiliance and Scalability are easier to provide with cheaper hardware and better understanding of how to achieve this.
10.History: Lessons from the dot com crash are not easily forgotten…
(Jana Techonology Services, 2006)

At the Technet Summit in November 2006, Reed Hastings, founder and CEO of Netflix, stated a simple formula for defining the phases of the Web:
“Web 1.0 was dial-up, 50K average bandwidth, Web 2.0 is an average 1 megabit of bandwidth and Web 3.0 will be 10 megabits of bandwidth all the time, which will be the full video Web, and that will feel like Web 3.0.” (Hastings, 2006)

According to Wikipedia, "Web 2.0 is a trend in the use of World Wide Web technology and web design that aims to facilitate creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, blogs, and folksonomies."

The short answer, for many people, is to make a reference to a group of technologies which have
become deeply associated with the term: blogs, wikis, podcasts, RSS feeds etc., which facilitate a
more socially connected Web where everyone is able to add to and edit the information space. The longer answer is rather more complicated and pulls in economics, technology and new ideas about the connected society. To some, though, it is simply a time to invest in technology again—a time of renewed exuberance after the dot-com bust.

However, Sir Tim Berners-Lee (the inventor of the web) has an opposing view on the concept of Web 2.0. When asked in an interview for a podcast, published on IBM’s website, whether Web 2.0 was different to what might be called Web 1.0 because the former is all about connecting people, he replied:
"Totally not. Web 1.0 was all about connecting people. It was an interactive space, and I think Web 2.0 is of course a piece of jargon, nobody even knows what it means. If Web 2.0 for you is blogs and wikis, then that is people to people. But that was what the Web was supposed to be all along. And in act, you know, this 'Web 2.0', it means using the standards which have been produced by all these people working on Web 1.0."
(Anderson, 2007)