From what I can gather, it is the same city, but different areas. The stories are not connected. What connects the games is the town itself. Basically, Silent Hill 1 takes place like north of where Silent Hill 2 takes place (guess Silent Hill is a little big).
While I still felt that Silent Hill 2 did maintain the same kind of feel the first one had (the atmosphere for example), have to admit, in terms of story (which would pull me in to these kinds of games) first one is better. Also, the puzzles and so forth, without a little help, does get annoying real fast (on normal. Didn\'t want it to play it on "easy" since...well, I wanted at least some challange). And neither game doesn\'t hold have the same fun factor (all IMO of coarse) to Resident Evil even though I feel that Silent Hill (both games) does a hellalot better in terms of atmosphere (BTW, since I have no GC, can\'t comment on the latest Resident Evil and how its feel and atmosphere is like compared to Silent Hill). Still, I did find Silent Hill 2 enjoyable. And when I get the chance, hope to eventaully finish it.