Honestly... The Quest 2 is a decent step up, although the Facebook requirement is less than desirable. The resolution more or less removes the "screen door" effect. The FOV is still lower than ideal, but it also means that you don't need a monster PC to handle it. The slight reduction in FPS (82 by default, but supports up to 120) helps negate the increase in resolution.
I race exclusively in VR, and have for the last 3 years (mostly iRacing), and I started with a CV1 and moved to a Quest 2 about 4 months ago. Nice part about Quest 2 is that the requirements are still fairly reasonable, with my 1660Ti handling AC, LFS and iRacing with ease. Upgrading my CPU from a Intel 4770k to Ryzen 5600x was the difference in iRacing between "usually 90fps with some dips" to "always 90fps"
With some of the higher tier headsets (Valve Index, Reverb G2, PiMax), you're basically required to have a 30 series nVidia GPU which are hard to come by (I'm checking my local retailer daily). These headsets have better graphical fidelity and have the benefit of being unencumbered by Facebook.
Personally I find VR to be the main reason why I got back into sim racing as everything feels natural. A single monitor is too constraining, especially at some tracks like COTA where having the freedom to look towards the apex is vital.
As for VR implementation, I agree that LFS is the best as things like mirrors feel the most natural. iRacing does a pretty good job, but constrains the player to a fairly tight .5 metre cube and will instead shift the viewport entirely rather than allow you to escape that cube, which is fine while racing.
The iRacing mirrors leave a bit to be desired as I don't think they're properly rendered from both eyes, and instead share a single rendering, but for the most part that's fine and only is a real issue with cars where the mirror is close to your face (MX5). iRacing does support some good technology like SPS to improve frame rates on compatible GPUs (20 series GPUs which includes the 1660Ti).