Web 2.0 refers to the second generation of websites or the web design itself. A Web 2.0 web has characteristics includes information sharing, interoperability, user-friendly design and collaboration. Examples of Web 2.0 sites include social-networking sites, wikis, blogs etc. Web 2.0 is not some kind of technical specification it’s rather concerned with how websites or web applications are developed and used by the end user.

Web 2.0 basically includes the web applications that can do more than just retrieve information over the web; they can give user a number of features over the web which in the past was only available as desktop applications.

“The characteristics of Web 2.0 are: rich user experience, user participation, dynamic content, metadata, web standards and scalability. Further characteristics, such as openness, freedom and collective intelligence by way of user participation, can also be viewed as essential attributes of Web 2.0.“

Wikipedia

The Web 2.0 websites are narrowing down the difference between desktop applications and web applications. Ajax has been used these days that can make an application look and feel like a desktop application for example: Desktop applications like MS Word has been implemented as web applications (WYSIWYG editors) that can provide the same functionality as well as the looks and feels. 

Some technologists say that the Web 2.0 is not a new version of web or a new way either, because it still uses the old Web 1.0 protocols, concepts and technologies. Ajax and many other technologies probably make a site more interactive but it is merely an abstraction layer over the Web 1.0 concepts. Moreover Web 2.0 based webs (mostly social networking sites) the interactivity or participation of users over the web makes the content over the web less reliable and in some cases unacceptable, because we may never know the hidden agendas, biasness and background of people.

I think Web 2.0 has made many Websites a success these includes Facebook, Myspace, Youtube, Flikr and many other. The newly developed social networking sites have also made hosting services to get cheaper and better, same is the case with the networking equipment as many people are connected over the web they increase networking hardware demand and as a result bring down its overall cost. Tim O'Reilly may have suggested a new version of web in “Web 2.0 conference, 2004“, but it rather turned out to be a new way.