I...frankly...can't imagine a world in which there is an argument that RE2 is better. I guess there's much more item management.
SH2 was amazing. Difficulty settings, puzzle difficulty settings--what non-puzzle game EVER has puzzle difficulty settings? Added some great replayability. The hanged man puzzle in particular was amazing.
Animations were great for the time, monsters were amazing. Atmosphere, music, almost every aspect of SH2 leaves a lasting impression. Pyramid head, Doorman, Eddie, those endings, TWO PYRAMID HEADS (dear god no), the fire, the prison, the hospital. Christ, what an amazing game.
RE2 was good. But...I frankly can't think of a single thing it does better than SH2. It does some things differently (like item management, the weird limited saves system), and I can see how some people could specifically prefer those things. But I don't really see how it's even a fair fight. SH2 is a gaming masterpiece and a crown jewel of Survival Horror. RE2 is a pretty good game you should check out if you're into classic survival horror. It's probably the best of the "classic" style RE games, but to me those all play second fiddle to any of the first three Silent Hills (and Fatal Frame 1&2) to start with.