Main difference is that the LS2 is a 6.0L motor while the LS1 is 5.7L... Both are aluminum block... Same stroke, 4.00 bore on the LS2, 3.90 on the LS1... LS2 has 10.9:1 comp ratio LS1 has 10.25:1... LS2 also has a different intake, which accomodates a 90mm throttle body...
(Got info from gmperformaceparts.com).
As far as which one will get more horsepower... I have heard many times "There's no replacement for displacement." Also, to substantiate that, the 4.00 bore of the LS2 is able to accomdate the L92 heads, which have been lauded as a solid and cost effective upgrade (
here's some articles on that...) In stock form
it says that the LS2 makes 400hp 400 tq, while the LS1 makes 350hp 365tq... (I think though that the power ratings have changed over the years, for example, I think like the 1998 LS1 was rated at 305hp or something like that...)
Also,

to a fellow Washingtonian