I was just about to ask this question, but there seems to be some differences: loading of remote data (I believe in chosen you have to hook yourself the ajax part), the infinite scrolling is also a good idea, and the drag & drop sort was missing.
Looks like it's based on Chosen.
Chosen doesn't support adding tags dynamically. It also looks like select2's api is more friendly and convenient. I will be converting my chosen dialog to select2 as it looks like an improvement overall.
The biggest thing here is the AJAX loading of data. Like I said in that submission, Chosen really chokes if you have thousands of items in it.
Thousands of items arguably don't belong in a combobox, they should probably be split by letter, country, prefix, etc.
Yeah I mean imagine if say Google did something like that for their entire search results, how ridiculous would that be...
I chose select2 for homehelpnow.com.au because of paged ajax lookups. Check out the place search box on homehelpnow.com.au. Its AU-based, so might be a bit slower for you US folk.