Web 1.0 was the classification of WWW earlier, which consisted of static HTML pages, rarely updated and less interactive. They depended solely on HTML sources. It was just like reading a book.
Web 2.0, the current classification evolved from Web 1.0 gradually and became more and more interactive. So its no more just a HTML page. It is rather a 'platform'. It has become more dynamic and more interactive.
We have also seen number of innovations in this era. RSS feeds, Plug-ins, Intranets, Weblogs are some to add to the list.