I had a similar problem: to go for a C2, a C2S (and possibly a C4S) from new?
Looking carefully at the specs you initially see that, yes - the C2S (and C4S) differ by engine size and hence power and torque, and yes, a higher price of £7K (and more for C4S).
The C2S differs from the C2 in having:
3.8 engine bigger bore (vs 3.6 "" same stroke)
19 inch alloys and PASM (vs 18 inch wheels)
Xenon lights
Sports steering wheel (v. slightly smaller and round vs triangular centre)
Some small trim differences "" soft silver trim accents, white dials etc.
Bigger brakes
Hydraulic self-adjusting clutch mechanism
Different air box (plastic vs metal)
Aluminium engine balancer wheel
The 3.8 engine is a derivative of 3.6 engine used in 996. To match the increased power and torque, Porsche provide bigger brakes (the faster the go, the quicker they must stop) and a hydraulically operated self-adjusting clutch mechanism which is supposed to be easier as the clutch wears, there is also an aluminium balancer wheel in the engine to counter increased vibration.
It's easy on a back to back test drive to detect difference in the feel of the two engines and the sound of the 3.8 doesn't disappoint. It's a moot point if this actually makes much difference. A slight downside of the 3.8 is a slight in-balance at start-up, and when viewed from outside there can be a slight shake of the exhaust. When on the move it's not a problem. Feature or problem?
The larger engine weighs the same as the smaller one because Porsche replaced the metal air box from the 996 with a plastic one (looks like aluminium) on the 997 to save weight to counter the slight increase caused by adding an aluminium engine balancer wheel used on the larger engine. Whilst they were at it, they also tidied up the visible bits of plastic surrounding the engine and introduced electronics to vary the way air is delivered through the air box which changes with RPM "" result is a deeper engine sound and the removal of unwanted harmonics.
The silver trim, white dials and steering wheel are just different "" not better or worse.
The combination of 19 inch alloys and PASM appears to be spot on, however I don't believe anyone will choose the 18 inch standard alloys and then go on to be disappointed because they are both well thought through alternatives. My interpretation of why they did this was because the 3.8 is designed to be driven a little harder than the 3.6, and the bigger alloys marginally improve the stability and grip at the expense of increased tyre noise and a harder ride. The increased tyre noise doesn't seem to be a problem and to counter the harsher ride PASM is provided. It's just my opinion, but I think they got it about right, and the two options seem to complement each other. Many people say that the 'off' setting of PASM is preferable to the 'Sport' setting - they may be ignoring the differences of the two settings - there are about 8 variations between the extreme ends with some overlap - and it's always 'on' - just with different programmed points - FWIW 'Sport' seems too extreme for me. Reviewers also seem to say the C2 is a well sorted package.
The xenon lights are bright without dazzling other motorists "" I don't get flashed, however they can be a bit bright when reflecting off nearby traffic signs. They also have a very good horizontal 'cut-off' "" unless you are right on the tail of the car in front, and it's possible to avoid annoying the person in front.
You can spec up the options on a 3.6 by £3.5K with some of the differences not being available. If your ideal includes PASM, larger wheels, and bi-xenon then the difference may be acceptable. If you later p/exchange a 3.6, any options may have a lower residual (could be 0) compared to any differences between 3.6 and 3.8. Either way the dealer will say what you have is 'right' when you want to buy and 'wrong' when you want to sell!
Although the differences are explained in the sales blurb, a good description can also be found in the book:
http://www.amazon.co.uk/Porsche-911-Story-Paul-Frere/dp/1844253015