These two games are very similar in almost every way. Steel Panthers is set in WWII, while Steel Panthers II is set from anywhere between 1950 and 1999, depending on the scenario. Steel Panthers II is a little more complex, since it takes into account helicopters and rockets, but in all other ways the two games are nearly identical.
Play is turn based, with the objective being to either take or hold the objective hexes. Each unit has statistics for its movement rate, fire power, and range, as well as seperate armor stats for each facing. This is where the game shines. In so many war games the winner goes to the player who has "local superiority". That is, even if you are outnumbered overall, you can still win battles by concentrating forces and having more guns to bear at any given time. This almost always gives the advantage to the attacker, since the defender must spread his forces to cover all approaches. In Steel Panthers I and II, however, the issue of armor facing becomes more important than numbers.
Every tank has more armor in the front than on the sides, and more on the sides than in the back. If you can position yourself to have your front facing the enemies side or rear, you will probably win the battle even if using inferior units. Steel Panthers I and II make excellent and realistic use of artillery and airstrikes. Unlike in Panzer General, for instance, artillery is best used to demoralize troops. Accurracy is relatively low, with shells often landing several hexes from the target. Also, if the target moves between the time you order the artillery strike and the actual strike (it takes a few moments for the crews to load, aim, etc.) then you will miss. This is where planes come in handy. They are ordered just like artillery, designating a specific hex to attack, but they do compensate where they attack based on what they see. In other words, you order planes to hit a location, but they will attack the units in or near that location.Both games have decent graphics, but Steel Panthers II really outdoes itself with its sound effects. Some examples are that machine guns, after firing and hearing the typical "rat-a-tat-tat" make a tinkling noise as the bullet casings hit the deck. The vulcan cannon, a gatling gun, makes a whirring noise after firing that is supposed to represent the barrels slowing down. Finally, the music is in beautiful stereo. I have played perhaps 3 games with as good of stereo separation in the music as in Steel Panthers II.
Another great feature is a very good multiplayer capability. You can play hotseat or PBEM (Play by E-mail), and I am currently engaged in battle with a guy who lives on the other side of the planet in Australia. The teams can be fairly evenly matched up, with the offensive team balancing the defensive player's ability to ambush with greater numbers of units. Also, the actual procedure to send and receive turns is very straightforward.
So what are the shortcomings of the game? To be honest, I have yet to find a serious flaw. I have read in some reviews that this game is an unrealistic "beer and pretzels" wargame. The only way I can see this game being watered down reality wise is that the turns are SO turn based. There is little attempt to make the two warring sides seem like they are moving simultaneously. For instance, you can send one unit ahead during a turn, scout out the terrain, and let any following units who have not used their movement points yet behave according to the results of the scouting expedition. Perhaps a more realistic way to play would be for each side to tell its units what to do, then have the units behave accordingly on both sides at the same time. Still, I would think that movement like this would significantly detract from the playability.