Xenon 2 is indeed overrated. The title music by Bomb the Bass made more popular than the game would have been without it IMHO. It's not a really bad game either, but there are many better shoot 'em ups on the Amiga.
I'm quite sure that Battle Squadron has more colors on screen and though they could be a bit more decent they look way better than the ones used in Xenon 2.
...and it didn't scroll smoothly