We had a 2nd birthday at our house last year for our daughter and it was great fun! Some simple games that come to my mind are London Bridge, Ring Around the Rosie, Follow the Leader, etc. You need short, simple games to capture their attention and when they are done, you move on. You can even sit together and sing songs that have actions- hokey pokey, if you're happy and you know it, etc...
Can you have it outdoors? How about playing with water? 2 year olds LOVE water! We bought my daughter the step 2 fun flow play sink because she kept wanting to play with water- all you need is water, a bunch of little containers, and some 2 year olds! Sidewalk chalk is great for outdoors, too. How about the old-school huge paint brushes and buckets of water? Or bubbles? There are some really fun huge wands they can dip and run with, or even the automatic bubble makers- 2 year olds could go crazy running through bubbles and popping them with their hands and feet!
Also, once I bought a little inflatable pool at Wal Mart for about $7 and those plastic balls (100 for $10 or so) and filled the pool with balls. Instant fun!
You could also have little "stations" with simple activities that they could choose- playdoh, stickers, coloring, etc.
Have fun!!!
Or if you're really brave, they can decorate their own cupcakes... :)