I switched my Touch HD (not HD 2) with some guy against Kobo H2O (edition 1). Both are happy
Touch HD has better software. I find no use for Kobo's software, so I'm confined to Koreader on Kobo.
The hardware consists of trade-offs both ways. Touch HD has page turn keys and is significantly lighter. Kobo HD is water resistant and has a bit bigger screen.
Other important points (microSD, frontlight, build quality, whatnot) are pretty much the same. Except that Touch HD [edit:] 2 has a tinted frontlight and Kobo H2O does not have multi-touch (e.g. pinch zoom).