The gameplay has two main branches. The game is split between trading and combat. The trading is fairly straightforward. You buy low and sell high. You buy industrial and imported goods in the big cities and sell them in the colonial towns. You then grab agricultural and colonial goods to sell back in the big cities. You also have the option to buy and build houses and businesses to get cheaper prices and a residual income.
The trading itself is through a simple interface at the docks. It works well for the game and is incredibly intuitive. The problem is that trading is almost too easy. Once you get used to the setup, it is really easy to make a lot of money quickly. I'm a little torn about this. It is nice that you can build your empire quickly and it does represent the great potential for growth the Caribbean presented. It is also nice to not have to spend a bunch of time looking at price charts like Patrician 3 often demands. It just doesn't feel as satisfying though. You would have to mess up pretty bad to actually lose money.
The reputation system is also a bit of a let down. Patrician 3 had a more intriguing system of politics that required a lot of work to rise through the ranks. All Port Royale 2 requires is that you earn enough money to get a new rank. There are little things that you can do to help a town, but they are almost never necessary. Just completing missions for your nation will make you a trusted ally.
There also isn't as much room for growth. You can never become an important figure. You can run your own towns and have a navy rivaling the established nations, but you won't be able to do much else with it. Becoming a governor ends the game. The aspect of city management is sorely missed, especially since it removes a lot of the cool inter-city politics.
Combat is one of the areas where Port Royale 2 triumphs over Patrician 3. Various laws made it difficult to do much fighting in Patrician 3. Port Royale 2 is different. It is possible to be a buccaneer for your country by buying a letter of marque during wartime. This lets you run a separate side of your business as a pirate and raider. You can do a lot of things too. The seas are very active with traders sailing, military convoys fighting, pirates plundering, and towns growing. You can do just about anything on the combat side. You can aid your country's war effort by knocking out military convoys. You can fill your own coffers by capturing traders. You can even raid and annex towns for great rewards from your home country.
The problem is that this again makes wealth quite easy to acquire. The only thing that will keep you going is a desire to buy up whole towns and personal goals to run the Caribbean. Once you start raiding, you will probably have more money than you'll ever need.
There are some annoyances that drag the game down though. Ships only do broadsides in combat. This isn't that annoying for ship battles, but it is really annoying when you have to raid pirate hideouts. To win these battles, you have to destroy the harbor cannons. This would be easy if you could focus 26 cannons on a single point. The unaided fire makes it unreasonably hard and annoying though.
There is also a dueling system in place that is absolutely pointless. If you are good at it, then it's a pointless mini game where you click on an enemy 20 times. If you are bad at it, then it is a permanent barrier that will make it hard to capture any pirates or towns.
Finally, the place of piracy in the game is annoying. Attacking a ship without a letter of marque is viewed as piracy. Your reputation falls with all of the countries. This isn't bad in itself. The problem is the aftermath of the wars. A country remains hostile to you even after the war ends and your letter of marque is invalidated. Their military will still hunt you down and attack your ships. Firing back at them will be viewed as piracy though. It's an annoying no-win situation that shouldn't be in the final game.