Prisoner of Ice, a sort of sequel to one of my favourite ags - Shadow of the Comet - was a big disappointment. It is probably one of the earliest examples of "dumbed down" adventures, with simplified puzzles and interface, extreme pixel-hunting and lots of non-interactive scenes. Bad game, which is strange considering it was made by the same people.
As for better sequels, I actually think the Runaway series improved with each game, from mediocre to very good. King's Quest 6 is arguably the best in the series, as well as Larry 7, Quest for Glory 4 and Goblins 2-3. And Simon the Sorcerer 3D is my personal favourite and one of my TOP-20 ags
With video games it's a lot easier to find good sequels compared to books or movies.