Electronic Arts and Bioware held an event in San Francisco earlier this week to show the first hour of Mass Effect 2 to the press and trickle out some more information prior to the game's January 26 launch. The demo answered some questions about the mysterious "death" of Shepard that early press materials alluded to (Spoiler Alert: Yes, he dies during an attack - but he's brought back to life by a pro-human survivalist organization called Cerberus). Bioware also demonstrated the game's streamlined gameplay systems, notably the combat that is even more shooter-like than the original.
Prior to our time with the game, we were able to pull Bioware CEO and general manager Ray Muzyka aside to discuss the project, and we'll be posting video of that interview later this week. While Muzyka was reluctant to reveal many specific details about the game for fear of spoiling the carefully constructed narrative, he did touch on the way that your choices from the first game will transfer to the sequel. The consequences of decisions both large and small in Mass Effect have been discussed at length in prior coverage of Mass Effect 2 but neither Muzyka or the game's executive producer Casey Hudson have revealed how this data is pulled across.
The bottom line is this, and it's probably no big surprise; you will need to have completed the first game for those choices to count. The status of characters, relationships, and side quests is only pulled from the last save that the game makes after you've completed it, Muzyka told us. So, if you rented the original and didn't beat it, but did see a major companion die - that won't count unless you go back and beat the game.
Interestingly the game does acknowledge a number of major choices for those of you without that final save to hand. After being revived by Cerberus, there are a number of conversations that test Shepard on previous events and resolve issues concerning the status of specific characters. He is asked at one point, for example, about his decision to save either Ashley or Kaidan at the cloning facility in the first game. This is presented under the guise of assessing whether his memories are still intact, but his response affects how those characters will be handled in the sequel.