Quick. Name a genre movie sequel (or second in a series) that was better than the original. There tend to be two movies that always come up when people answer that question, with a bunch of others that come up less often.
The most common answer I get is Aliens, directed by James Cameron. I'm somewhat unusual in not agreeing, but only by a little: if I had to pick one of the two to be the only one I'd ever get to see again I'd pick Alien (directed by Ridley Scott), but I love both movies, and consider them too different to really compare. The tone is entirely different, and they're practically different genres: the first is horror with a side-dish of sci-fi, while the second is action sci-fi, with a side-dish of horror. Still, there's no question that Aliens is no Temple of Doom, or any of the other sequels that are a great disappointment (no, I refuse to mention that movie about an immortal Scot by name, that would be bad luck).
Not far behind is T2: Judgment Day, also directed by -- this is probably no coincidence -- James Cameron. There's no question that the production values on T2 really shine compared to the lowish-budget feel of the original, so in a lot of ways, T2 shows the promise of what the original could have been. On the other hand, the original's production values are remarkably good for the budget they had, and the film holds up surprisingly well. A few scenes with the endoskeleton at the end look a little clunky, and the pacing on them isn't great. But in most of the film, the budgetary weakness gets turned into opportunity, giving the film a feel that really suits the tone. The Terminator has two other advantages over T2. First, the bigger budget let Cameron indulge himself in some of the set pieces to the detriment of the pacing, notably in the truck chase scene at the beginning, which could afford to be shortened. Second, the original's treatment of time travel is far more intriguing. In the original, time travel cannot change anything, in fact, it ends up being responsible for the things it seeks to prevent, so Skynet's plan was doomed from the start; but you can't really make that obvious at the start without ruining the suspense. (Not like Twelve Monkeys where revealing that didn't take away anything since the suspense wasn't built around the idea that James could change the past.) So they had to change that for T2, or face that same problem, which made time travel watered down to just a conceit for the action, not a mind-blowing twist.
After those two, there's few films that really garner a solid consensus. The Empire Strikes Back is the best-loved of the Star Wars films for many people, but probably not a majority. I've heard people say Godfather 2 achieved the remarkable accomplishment of besting the original, but again, that's far from universal. Feel free to comment with your own nominations.
So what does it say about James Cameron's filmmaking that the two shining lights of sequelmaking are both his? Does it give us hope that sequels to his other films (notably Avatar -- it's not like we're going to see a sequel to True Lies or Titanic any time soon) will be good stuff, avoiding the all-too-common sophomore slump in movie-making?