Ethereum 2.0 101 Visual Demo by Vitalik Buterin.
Ethereum 2.0 is a term used to describe a series of potential updates to Ethereum to make it, for lack of better terms, faster and better.
Potential updates to address current scaling issues, issues with mining, and to some extent issues with security include proof of stake solutions (Beacon Chain, Casper FFG), Sharding, eWASM, Plasma, Raiden, and more.
Each of the above solutions either addresses scaling (AKA it makes transactions faster and thus creates a better environment for smart contracts and DApps), changes the way Ethereum is mined, and/or helps make the network more secure.
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