There's some confusion around the new model. Numbers usually go up not down and functionality typically gets added to gadgets, not taken away! But the 2DS is a variant of the current generation 3DS console without the 3D functionality and with a different shape and design.
Games for the Nintendo 2DS and 3DSThe Nintendo 2DS plays the same games as the 3DS, it just doesn't support the 3D effects in the 3D games.
The Nintendo 2DS and 3DS both take physical cartridges. You can use older generation Nintendo DS game or the newer 3DS games.
Note that the 3DS allows the 3D functionality to be turned off to disable the 3D feature so you don't have to play in 3D on the 3DS.
You can also buy and download games for the 2DS and 3DS from the Nintendo eShop.
Recommended AgeThe Nintendo 2DS is aimed at younger children than the 3DS. The 3D feature is not recommended for children under 7 years of age because their eyes are still developing and the effect is not understood.
The physical design is also intended to work well for younger kids.
3D FeatureYou can turn off the 3D effect on the 3DS and restrict it with parental controls but I guess the 2DS allows parents the security of knowing that the 3D feature cannot be accessed by the child under any circumstances. It also means that you are not paying extra for a feature your child can't use. Some parents of older kids will also want to avoid the 3D feature as unnecessary.
Some people love the 3D feature, others can take it or leave it. As kids get older they may see the 3D feature on a friends console and really want to upgrade. This is hard to predict. Some kids will be quite happy without it.
Design and WeightThe physical design of the 2DS is also intended to work better for younger children. The hinge of the 3DS is a weak point and can become loose if kids are rough with it. Young kids may find the wedge design of the 2DS more comfortable. Note that the 2DS at around 260 grams is actually heavier than the 3DS at 235 grams though [source].
As you would expect, the larger 3DS XL is the heaviest in the range at 336 grams. (By comparison, an iPad Mini weighs around 308 grams.)
Personally I've always been rather fond of the clam shell design as it protects the screens when kids put the device down and wander off as they are prone to do.
One of the features that I know is important to my kids is actually the choice of colors. The new 2DS comes in either red/white or blue/black color ways. Whereas the 3DS is available in a range of colors and special designs. The XL is also available in a range of designs and special bundles including Pokemon X and Y. This will be a deciding factor for some kids if parents are able to afford the extra cost.
ScreensThe Nintendo 2DS has the same two screen sizes as the 3DS they are just placed one above the other rather than being in a hinged configuration. In both cases the lower screen is a touch screen.
The larger screens of the 3DS XL are of course its main feature.
AudioThe 3DS and 3DS XL have stereo speakers. The 2DS has a mono speaker but does support stereo sound via headphones. This probably isn't too much of an issue for a younger audience or those who want to save money.
CamerasThe 2DS has the same camera system as the 3DS so it can actually take 3D pictures. It can't view them though. I guess that it wouldn't have saved any money to remove this capability so it's still there.
The 2DS claims a slightly longer battery life from a charge that takes the same amount of time and doesn't have the power saving mode that slightly improved battery life on the 3DS. Not much to choose between them here.
PriceThe 2DS is a cheaper entry level device and has a MSRP of $129 versus $169 for the 3DS and $199 for the XL.
SummaryThe new Nintendo 2DS is basically the same hardware as the 3DS but offers a cheaper way to be able to play new Nintendo games. It could be a good choice for those on a budget who are not likely to want to upgrade to get the 3D feature in the future.
As I've said, personally I like the folding design of the 3DS and XL which encourages kids to close the device and protect the screens when they stop playing. I'm not actually bothered about the 3D feature. My older son is almost 7 so that might change once he has a chance to try it out.
There's a good market for used Nintendo games consoles so you may be able to sell a 2DS is you do decide to move up to a 3DS later.