We could help, but “a recent sequel to a great racing game” isn’t really specific. Could you maybe give out some more details?
I like Burnout Revenge. It has a bulldog like obsession with delivering nosebleed levels of speed while letting you inflict carnage on your enemies.
All time favorite racer is the first Motoracer. Awesome game. Fast, graphics that have aged pretty well, decent variety in tracks. Unfortunately its sequels suck beyond all possible belief. No personality at all, ugly graphics, bleh.
Have to say Mafia. I know it isn’t exclusively a driving game but after beating the main story line in the game it provides hours of fun just driving the cars around town getting in police chases and gangster drivebys. The only drawback is that they didn’t get the real car licenses but the models are identical to the actual cars of that era. There is a mod that changes the fake names to the real ones though. It has a great balance of realism and fantasy in the physics of driving and crashing.
Another vote for Burnout: Revenge, but unfortunately I do not own an XBox, so I have to live with simply playing Burnout 3 for the Cube.
Live for Speed, NetKar Pro, and Nascar Racing 2003.
Quite different from the other games in the thread - these are meant to be exceedingly accurate simulations.
Here tis.
GTR 2
The finest racing simulator for the PC available. Physics. Damage. Online. $20.
Enjoy.
Actually, B:R is also out for the ps2. Probably not helpful to you at all, though, to point that out. 
The Need For Speed series is mindless fun, NFS Porsche Unleashed is a decent driving sim from what I understand.
Need for Speed Hot Pursuit 2 and Need For Speed Most Wanted are what I play when I just want to drive fast through some nice scenery.
Grand Theft Auto III, Vice City, and San Andreas are also great to just cruise around.
Nah, LFS is better. GTR2 still feels like a video game.
Give it a shot - I guarantee you, if you like GTR2, you’ll love LFS.
Going old-school, Test Drive 2. Especially with all the car and scenery add-ons.
I stand corrected. LFS is what I was thinking of when I read the GTR2 review. I confused the two. LFS S2 is the better game. Mmm. Lotus 7s.
Slightly older: Interstate 76. But not Interstate 82. Great fun driving and shooting. So much fun driving that we’d have non-shooting races of just the cars. One of the few games that really felt ‘right’. Right up there with Test Drive 2: The Duel
Stunt Driver was silly, but fun.
Great game, too. I prefer the PS2 version over the PC because I like circuit courses.
Need for Speed: Underground (and Midnight Club 3) is also good for fast arcade driving. They changed the rules for the career mode in Underground 2: it’s not about winning anymore, you get points according to how much you win by. No, thanks.
Dunno about Skodas but there is a Vauxhall–as well as its Opel equivalent–in the aforementioned Hot Pursuit 2.
Test Drive: V-rally 2 for the Dreamcast had them. That game was way better than it had any right to be. Some people thought the physics was too slidy and floaty, but it felt about right to me. Damn, I miss my Dreamcast…