I'll try to remember but will probably forget the majority of the improvements. added 41cc , went from 4 to 8 fuel injectors, new piston design, pair valve completely changed , undercut tranny ( no more second gear issue ) , headlight assembly improved ( I don't ride in the dark or rain unless I have to, but the headlights from the factory take care of me at night on the Gen II , I had to upgrade to HIDs on my Gen I ) , instrument panel and all plastics completely redesigned. For me the fairings are easier to deal with, they incorporated a lot of snap on elements to replace bolts and push pins. Back to the cluster, we lost the little gas mileage thingy that I really liked, you have a
gear indicator, shift light, to name a few, retarded A,B,C mode switch

The seats were changed and I think the Gen I seats were more comfy ..... I still make 7 - 9 hour rides,
The Trunk disappointment, gen I much bigger and better but the hump mod comes from the factory on the Gen II

Tail section and signals complete change, signals became part of the body and the mudflap delete only requires a few push pins vs. dremel. LEDs incorporated, they last for ever ....
Brakes improved radial mount up front, different calipers front and aft, smaller lines from factory up front. You never hear that here, but that's my observation. Rear caliper mounted on top v. bottom, slides into swingarm on Gen II. Rear axle nut changed, castle nut with cotter pin on Gen I, self tightening nut on Gen II. Newer better Bridgestones from factory but I don't think that really matters. Different front axle arrangement up front. I like it better. Rectifier relocated from tail section to belly pan / wing. Fork springs were improved.
This isn't anything but my opinion, but the bike stops better, corners better, and has more acceleration than my Gen I, and I don't have any false shifts. The headlights are adequate for me at night. I loved my Gen I but I really love my Gen II. 36K trouble free miles on the '06 and now 36K trouble free miles on my '08.