The problem with this sequel is that the spirit/killing scenes are creepier than in the first movie but all the time inbetween them seems like "filler", with far too many characters and little character development.
The story continues from the first, with Sarah Michelle Gellar's sister (Amber Tamblyn) going to Japan to see her sister in the hospital at the urging of her mother (Joanna Cassidy in a throwaway role). She hooks up with a Japanese guy and they both go to investigate that original house where the spirits originated from. This is all boring because we've been through this in the first movie.
There is a second story, however, which takes place in Chicago. A father has remarried and his new wife is now living with him and his son and daughter. Things start going strange with the appearance of an odd next door neighbor--and those same spirits from Japan start appearing. It's not until the end when we find out the connection to this and the prime tale.
THE GRUDGE 2 isn't a terrible movie, just a forgettable one.