You can't use HCD lenses with the H2.
You need the H4X for that but with the H4X you will be missing the lens corrections since you will not be using Phocus, so it won't be perfect either.
If you are looking to use the HCD lenses you really want to be on a H3D/H4D/H5D body.
If I recall correctly the H1 to H2 upgrade is around $500 in the US. It comes with the rechargeable grip and a charger.
The H2 has slightly better autofocus than the H1 but besides that if you are on the latest H1 firmware there won't be too much of a difference.