Ok, I just got to "gen2" and I guess the best way to describe my impressions of this is HUZZAH!
Reaching this point pretty much fixes all the major difficulty problems I've had with the game thus far. The stake is no longer overpowered, the special vampire types are actually threatening, and minions are no longer pointless.
I guess on that note my concern is here that it takes long enough to get here that a lot of players will likely not reach this point and just quit early assuming the balance is way off.