Just a quick definition.
Web 2.0 is all the websites out there that get their value from the actions of users
Before doing my stint in digital at Agency Republic I thought Web 2.0 was a whole new type of software or a new version of the net, but it's not - it's just a term used to categorise sites and services that derive their value from their users.
Check out Fan Pop - it is a site where content is collated into 'spots' about certain topics. The Web 2.0 Spot is as good a place to start as any, if you are interested in learning a bit more.
Web 2.0 relates back to social media, it is all part of the same thing. Have a look at this guide to Social Media Download What_is_Social_Media.pdf
Think YouTube, think MySpace, think the millions of blogs that are out there - it's part of web 2.0 and social media.