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Rifle Scopes Are the VX1 much better than the VX2?

Unless something has changed in the Leupold line, the quality goes up with the higher numbers. VX-1 is the bottom.
 
MJY65 is correct, Leupold glass quality basically ranks from low to high: VX-1, VX-2, VX-R, VX-3, VX-6. And yep, the VX-2 is a little better than the VX-1, due to better coatings.
There are tons of great Hunting scopes for $200-300, with Leupold in the lower end of the pack as far as what your money gets you.
Look at the:
Redfield Revolution (made by Leupold now, basically a VX-1 for cheaper)
Vortex Diamondback
Weaver Grand Slam
Burris Fullfield II and E1
Leupold Mark AR
Leupold VX-2
Bushnell Elite
Nikon Buckmaster
Sightron SII

And, my personal Favorite, Minox ZA3 3-9x50. Samplelist has some left, and maybe CameralandNY. You can find my review here: Minox ZA 3-9x50 review and comparison... - The Optics Talk Forums
It has been ranked by several people as being very close to a Zeiss Conquest and can't be beat optically under $450, IMO. You may be able to find one of the 40mm versions, the ZA3 is being discontinued for the ZA5, but most say the ZA3 is better.
 
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The VX1 and VX2 are similar in glass, the major difference is the VX1 has friction turret knobs and the VX2 has the pop bottle cap type, with positive clicks. The VX2 can also be upgraded with external turrets for $90 each if you later want a CDS knob. The real jump in glass quality is from VX-2 to VX3, the VXr has the same glass as the VX2 as does some of the lower end MK4 .

For $300 I would look for a used VX3.

On a tight budget, I would consider and do have a couple Redfield Revolution scopes. They are made by Leupold in Oregon and carry the same warranty as the Leupold scopes. These are the Revolution, not Revenge or battezone etc. Side by side, they greatly resemble the VX2 scopes and cost about $200.
 
Is the vx1 decent or is it just buying the name?
It would work fine for most guys on a hunting rifle. You are buying the name, and with that the excellent warranty and great customer service, and a light weight, tough optic. They are perfectly usable scopes, I was just saying if you're into clarity and resolution, there are clearer scopes for under $300. Such as:
Minox 3-9x40 ZA3 Rifle Scope DEMO-A

Those were $420 last year...