If the Wall Street Journal is reporting it, then it must be true. :) The iPad 2 is in production in China.
More memory, faster graphics, and built in video conferencing seem to be the highlights. However, there is not a higher resolution screen as many predicted. I imagine it would be very difficult to line up enough manufacturing capacity to produce high resolution screens, given the current demand for the iPad.
Expect iPad 2 in a couple of months.