I'm currently testing out the Zoom H2 and the Zoom H4 recorders. The H2 goes for $200 and the H4 is $300.
My quick takes:
H2 is small, easy to figure out and use. It has some useful accessories (stand, mic stand adapter, earbuds) and can record a full 360 degrees into 2 stereo tracks (set it in the middle of the room) or either 90 or 120 degrees from one side (it has 4 mic capsules). For recording practices or gigs, this is a handy solution (and it's actually called Handy Recorder). Compared to the H4, the high frequencies are similar but the low end isn't as strong.
H4 is a bit bigger and more complex to learn and use. It doesn't have as many accessories, but can do so much more because it is also a four-track recorder. It has built-in effects for guitar and bass, as well as mic modeling effects for a few of the most popular studio mics. The current 2.0 system software brings some new features as well as a much more readable font. The auto level setting (doesn't ride the gain, but sets the max level before starting) is helpful. Has two combo 1/4" and XLR input jacks on the bottom. Comes with Cubase light sofware.
Both can also be hooked up to your computer with a USB cable into Garageband and other software, or even can be used as a computer interface with its built-in mics and preamps. They both have a metronome and tuner (I haven't tried these yet). Mics have a 3 level sensitivity switch. They both use SD cards and can record at different levels of resolution as well as MP3 format for really long recording time.
In all, despite the somewhat weaker low end, I'd pick the H2 for recording practices and gigs because of its usability. For a hundred bucks more, the H4 brings a lot more features and better frequency response if you can take advantage of that.
