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Eh, the issues with the character models in the first game stemmed from the basic design philosophy. If you look at the original trailer for WKC, the character models look excellent, but they later decided to recreate all their character models using the in-game editor, and it gave them all a slightly more rounded, baby-faced look, causing them to look kinda off.

The ever so slight cel-shading they've added in does improve the overall look of the characters, I will say that. The lighting model has also improved , and it was pretty good in the first game already. The environments still look pretty bad, though. The ground textures are horribly low rez.