Hmmm.... We have two second gen iPads in the house and both did the update. No complaints so far and in the limited testing I've done they seem to be as good as before. We didn't do clean installs either. These are my daughters iPads so who knows what kind of messy state they are in? 
So, we've had good luck with the latest OS on second gen iPads.
So, we've had good luck with the latest OS on second gen iPads.