About Halfway thru the game, you have to decide whether to save Alice's [That's the blonde haired girl who appears on the front of the packaging in Yuri's arms] soul or not...
If you decide to save her, you unlock the good ending and if you don't save her soul, you get the bad ending and regardless of which ending you get in the original, the second game is still based on the bad ending...
Indepth Guide
GameFAQs page for Guides to Shadow Hearts
Hope this information is of help to you, Keith!
BTW, wait till you meet Margarete and Lt Kawashima as they're total hotties!