Web 2.0 allows users to interact and contribute content rather than just passively viewing information. It uses technologies like JavaScript, Ajax, and APIs to asynchronously update pages without reloading. Telco 2.0 refers to telecommunications companies adopting these Web 2.0 strategies by opening their networks, focusing on services around customer data and multimedia, partnering with internet companies, and creating a more user-centric experience. The future involves further adoption of cloud computing.