It's supposed to be better, but it's not "WHOA" better. If you want a REAL upgrade you need to go 16-50 or 17-70.
I couldn't probably tell the difference in a print. When I got my 18-55 II for free I sold off my previous 18-55 I without really trying to work out if the new one really was better -- the consensus seems to be that it's a little sharper and more well-suited to 10+ MP sensors. Since I bought my 40/2.8 I hardly ever use the kit lens anyway