I'd say it's a direct sequel. AND a prequel.
Ironically, KOTOR II retcons KOTOR I, giving the latter far more meaning and depth than Bioware dreamt of giving it. KOTOR II is a sequel, but in a lot of ways, it's really more about what happened before and during part I...
Oh, and you'll find that the Dark Side is more attractive in II than it was in I. Mostly because now the Dark Side is more than just "I'm an a**hole." The damndest thing is that, in a lot of ways, the Dark Side option can sometimes lead to making the galaxy stronger than it was before. Whether that's necessary, or worth the price, is a different question, one which II revels in exploring.







