iPad 2 is expected to be unveiled and launched approximately the same time of the year as the original iPad was unveiled (January) and start shipping at the same time as well (April).
There are a lot of rumurs about the iPad 2 but one of the most certain updates will be a new high resolution Retina display for the iPad as well. Expect a resoultion north of 2,048 x 1,536 (the current iPad has a resolution of 1,024 x 768). You can also expect a second dock connector which will enable you to dock the iPad in landscape mode. And, of course, a camera. Most probably it will be equipped with two cameras. One low resolution front facing camera to enable facetime features, and one high resolution camera on the back for HD video and real camera usage. More storage with a new 128GB version will show up as well, and the 16GB version will be skipped.