A recent survey from Microsoft shows some of the types of features the studio is looking into for the sequel. Dance Central 2 has supposedly been in pre-production since before the original was even released.
Some of potential features look to expand the game’s functionality; the ability to choreograph custom dances will appeal to core fans, while the addition of back-up dancers will add some Rock-Bandesque co-op gameplay. Apparently there may also be a “fitness mode”, pushing the game even further into the casual zone. There are also some technical improvements listed; the ability to replay specific portions of a dance and more helpful advice on how to improve.