Some of you may have read my post "What is R2" and wondered why on earth I only posted a single (not particularly funny) line entry. Many people ask me about R2 and so I figured I'd write a meaningful post - unfortunately I accidentally posted it as it was.
R2 stands for "Release 2" - it is a generic term and doesn't relate to a specific product. The idea is that we release an interrim version of our high profile products (like Windows Server) in between the major releases - this is based on customer feedback that frequent major releases are too difficult to keep up with. The first "R2" release is going to be Windows Server 2003 R2 - you can read all about it by clicking here.
Essentially R2 is like a service pack with many optional additional features - you can either just install the updates OR choose to take advantage of additional features. This means that your testing matrix is much reduced. A design goal of R2 releases is not to change the kernel - again this is to reduce your testing burdon.
Windows Server 2003 Release 2 includes some interesting features including Active Directory Federation Services (ADFS) which makes it much easier to provide access to information resources for your partners and customers thus reducing the pain of account / credential management.