I've seen various threads asking what to expect from a GXT 2.0 upgrade. For what it's worth, I'm currently working on a fairly complex enterprise application and we just took the plunge in hopes of resolving some lingering issues in 1.2.x. Our experience has been pretty lackluster so far, though not all that inconsistent with the GXT experience to date. However, this is obviously a preview version that we decided to take on early knowing the risks. On another note, core GWT 1.6 has felt quite positive. Details here for any interested:
In addition to the explorer using it, I noticed the release notes and build.properties changed to reflect M2 in svn this afternoon so I would guess the M2 timeframe is very soon...
We've upgraded to M2 and it seems to be very similar to M1 but with noticeable quality and performance improvements. Definitely get M2 if you're on M1! Notes posted here.