In a chat with PC World, lead producer Casey Hudson spoke at length about the hundreds of ways that actions from the first game, not just "big choices," can change things in the action-RPG sequel due on PC and Xbox 360 early next year:
When you're playing the first game, everything that you do is setting a variable so that as the story progresses we know that you did a certain thing on a certain planet, and then internal to the game, we can reference those things. Your Mass Effect save game contains all of that information.
When you import it into Mass Effect 2, now we can continue mining all that information. And it's not just what your ending was, or a couple of the big choices, you know, where we could have stuck a conversation at the beginning and asked you what you did and moved on. This is literally hundreds of things.
Anytime we have a plot or a character or situation in Mass Effect 2, we think about what you did, potentially, in the first game that might affect said plot or character or situation in the second. We can look at each variable and dynamically change what happens in the moment. It ranges from small things like, by way of example, Conrad Verner was a fan of Commander Shepard's that you met in the first game, and it's like you meet this guy in an alley and you can be nice to him or you can be a jerk to him, and at the time you might have been thinking of it as just a trite role-playing convention, good-guy bad-guy, and that's that.
Jump forward two years. Now you're playing Mass Effect 2, and oh my god, who's this, it's Conrad Verner! And based on what you've done, you realize that while the moment in the first game maybe seemed throwaway, now Conrad's back and involved in another plot in a game you're playing two years later...and what you did two years ago is meaningfully affecting what's happening. That's a small example.
(WARNING: MASS EFFECT 1 SPOILERS BELOW)
The larger examples are things like...take the way you navigate through the ending of Mass Effect, how you left the galaxy in a certain state with humans, whether they were in control of the Galactic Council or not, things like that. In Mass Effect 2, when you walk around, you'll see all the areas affected by your decisions, including large scale stuff like the Citadel. You'll see signs all over the place that either humans are in control or that they're working more with the aliens and the Citadel is more like it was in the first game.
Of course, BioWare is also planning to make use of similar data import functionality for the third Mass Effect game, which should make things mighty interesting considering the impact that certain choices in Mass Effect 2 can have.