Tim O'Reilly, who asserts that he is not fond of definitions (hmmm... what a strange world that would be, without at least approximate definitions) offered this as a handwave at Web 2.0:

[from O'Reilly Radar > Web 2.0: Compact Definition?]

Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver rich user experiences.

In my recent travels interviewing a batch of incredibly focused Web 2.0 folks, I have uncovered a few central tendencies in their approach to developing Web 2.0 apps:

• Users First -- The user experience is a proxy for the user, and all of the folks I touched base with so far agree that user experience is the pivot point of everything. That means that the norms of human expectations, social interaction, and interface goals become the central motif of these apps. For example, sharing with others becomes a basic principle, not something tacked on later.
• Build from personal need -- In every case, these visionaries have decided to build something because they wanted to exist for their own personal use.
• Build small, fast, and iteratively -- The nature of Web 2.0 app frameworks, and why they have evolved, is to support a extremely agile development mantra. But across the board, I have seen very small teams building the core functionality of some potentially larger product, and rolling it out to real users to see how it works. And then respond to feedback, and roll out the next version. This is not just a technique for the initial development stage of these products: its here forever.
• Build small, focused apps, that could serve as building blocks in larger assemblages -- All these folks are resisting the tempation to bloat apps with more and more features, opting instead to build small, highly focused apps that could be integrated (though APIs) into larger assemblages (mash-ups).

More to follow, but I thought I would offer some bottom-up thoughts on the 'spirit of Web 2.0' discussion raging these days.