I've encountered a pretty show-stopping bug in Kontakt 2 in terms of musical quality... there is something wrong with Kontakt's interpretation of velocity, because its definition seems to have been changed to volume, while velocity itself stays at a default level of 127. In other words, changing the "velocity" of a note affects its volume, but not its velocity. On my MIDI controller, striking a timpani note yields a ffff crash, but lightly tapping it yields a faint, yet audible ffff crash. This is true also of velocity changes in my notation program, even in just clicking notes on Kontakt's electronic keyboard, so it seems that Kontakt itself is to blame.
I've tried adjusting pretty much every single option I could find in Kontakt; no luck. I suspect there is a problem with the installation of Kontakt/GPO, but I installed the update as instructed. (It might be worth a try to reinstall - does this void one's "license," though?)