TBH I'd choose MGS3 as the most sequel with the most drastic drop in quality. The characters, the story and even the gameplay IMO were such a huge step[ backwards from MGS2. Everyone their own I guess.

Now I want to re-play TTYD!

I'm probably going to get laughed out of the thread, but I'd like to go against prevailing opinion on a few sequels.

Dead Space 2
I actually prefer the first one. Something was lost between sequels. What felt like a claustrophobic, atmospheric survival horror game shifted into a high-octane action game with huge action set pieces and scripted segments. I liked Isaac as a silent Gordon Freeman-esque fish-out-of-water. His transformation into a JAG (just another guy) who takes control of uncontrollable situations and performs superhuman feats was disappointing to me.

Killzone 2
Once more, I prefer the first one - sacriligeous, I know. But, again, it's all about what was lost between sequels: four playable characters, secondary fire, sympathetic heroes, a meaningful story.

Assassin's Creed II
So, I know a lot of gamers found the first Assassin's Creed repetitive and plodding, but I actually found the gameplay loops to be engaging. Search out intel, plan your route, take out the target - lather, rinse, repeat. The sequel attempted to fix any repetition by throwing more stuff at the player. So, yes, the world is larger and more open, but the content inside that world is mundane and spread out thinly. Much of the game is spent wandering from point A to point B, taking on some unspectacular fetch quests or rooftop races along the way. The first game, to me, was a leaner, meaner experience. 

Uncharted 1 : Above average adventure game.

Uncharted 2: Changes the way the world sees video games.

MMII, Mass Effect 2, Ratchet & Clank: Going Commando, LttP, Majora's Mask in terms of pure mechanics, Uncharted 2, Mario Galaxy compared to Sunshine, and so on. I'm sure there are others I'm forgetting of course.

In my mind, it's ToD.

In that case I beg to differ! While ACiT is an improvement over ToD, I'd hardly consider it one of the "most improved sequels". Also they ditched the raritanium upgrade system from ToD which was super awesome (Luckily they got back to their senses and brought it back for ItN and the remake).

But ahh, opinions. They're like an ass; divided.

Saints Row 2

gothic 2

Super Smash Bros. Melee - The N64 game is great (even if some people don't think so), but Melee really showed what the series was capable of with way more content and refined gameplay.
EarthBound - Mother (EarthBound Beginnings) is a charming game that I had a great time with. That being said, the interface and battle system were vastly improved for EarthBound with the removal of random encounters and the addition of the rolling HP meter.