I was a bit skeptical about the first two setting chapters, but I think the new system definitely justifies the existence of Changeling: The Lost's second edition. As I observed with Mage: The Awakening, the new system for this edition is much more in line with what the storyteller games are trying to accomplish. And Changeling, in particular, benefits from a system where players have more narrative control.
The thing I like most about the new edition is the changes to the way Contracts work. Before, they were ranked 1 to 5 and you bought each clause in order, meaning that two changelings with the Mirror 4 Contract looked and played pretty much the same. The old system's rigid structure could even wind up saddling a character with powers that didn't fit their basic concept. In second edition, the individual powers are divided into "Common" and "Royal" clauses, and you can select them a la cart.
I also like the new mechanic by which Contracts can be modified by a character's Seeming, so that you could have something like an Ogre with the Contract that gives an enemy bad luck, but since it's an Ogre that used it, the target is also afraid of the unspecified terrors of fate. This is neat and I love it, but each Contract only has two alternate modes, leaving four unspecified. It's a lot of work to fill in the gaps, and I'm hoping that it will get patched in a supplement.
The only thing I really dislike about the new system is the new personality traits - Needle and Thread. These work a lot like the Nature and Demeanor of the old world of darkness . . . and that's it. That's the flaw. Nature and Demeanor were a nebulous personality mechanic that gave you a modest reward under circumstances that were difficult to remember and harder to judge. They almost never came up in the WoD games I played, and I doubt their counterparts are going to get much more of a workout here. Plus I find those names "Needle" and "Thread" to be a little twee.
But that was the only complaint I have about this particular section. Other than that, new changeling is almost uniformly better than old changeling. And when it's not, it's at least no worse. Like, the new Pledge system is something of a step sideways. It's much faster and easier to use, but it accomplishes that by basically just ripping out all the elements of the old Pledge system that made it feel like a secondary freeform magic system. I'm calling it a wash, but I'm sure there will be some who would be devastated by this change.
Now that I have the driest part of the book out of the way. I expect the rest to go very smoothly. I was pleased by what little setting information I got in these two chapters (the Hedge has more geography now, including a few fixed locations, like the village where giant spiders force a few terrified captive humans to LARP as normal medieval peasants in order to lure travelers to their deaths). Chapter 5 looks like it's going to expand the world of Changeling: the Dreaming beyond 1st edition's Miami, and I am greatly looking forward to it.