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I've not played Forza 2 but I have played Forza on the xbox and own both; gt4 and gt5p. The differences are:

Forza:

1) more street customisation ( paint jobs)
2) car damage, both; physical and cosmetic
3) in game soundtrack support
4) cars don't bounce of Walls so you are forced to drive properly
5) car open to damage means you have to drive more vigalent
Gt:

1) better graphics
2) more cars
3) more challanges ( license chsllanges, manufacturer races, power races, model races)
4) gttv (perfect for car ebthusiasts who love car programs)
5) teaches you how to race properly


From what I know, gt5 will have over 90 tracks plus track editor.
Damage will be the most realistic damage you will see.
Weather will be added.

If these things are covered, not only will gt5 have the advantages it held earlier, but it may even surpass forza on damage and weather.

I prefer gt because as a car enthusiast I get more cars, car history, car shows and it teaches me how you should race.

The bouncing of Walls has been kind off sorted in gt5p as in the s class races and online, you get penalized for it, but better crash physics must be implemented if the game is to call itself a sim!