What are the practical differences between a line gradient and a cardioid mic? I know its a difference in the way they pick up sound but what does that mean in the real world?

Also, I was just wondering if anyone had comments on the Rode NTG 2. Soundprofessionals.com is sold out of the Audio Technica AT 897 but recommends this mic as an alternative.

When I say shotgun, I really mean a microphone using the line-gradient design.

A shotgun is a lot more directional than a cardioid mic. It picks up less of the sound that hits the microphone from the sides/back. This is nice, as the problem with many recordings is that there's too much background noise.

When sounds strike a shotgun off-axis (not from the front), there is a lot of sound coloration / the frequency response is extremely uneven / it sounds weird or "off-mic".
There's about a 30 degree cone for shotguns where things sound fine/normal, but anything off-axis sounds off and lower in volume.
With cardioids, off-axis sounds drop in volume less compared to shotguns. They also have an even frequency response, and off-axis sounds tend to lose high frequencies. Far enough off-axis and things will sound "off-mic".

By off-mic I mean that it sounds like the microphone isn't pointed at the sound source. It's kind of a circular definition, so that's not exactly helpful.

Indoors, shotguns sound really weird. I think it's because the echoes and reverb strike the microphone off-axis (and shotguns have really bad off-axis coloration).
A clip that shows this really well is
http://www.dvfreelancer.com/media/beaser/ME66Left_OktavaRight.MPG
The Oktava is using the hypercardioid capsule. Hypercardioid is like cardioid except more... so more directionality/rejection, more loss of high frequencies in off-axis sounds.

More differences:
Cardioid microphones tend to have lower self-noise. I think.
Shotguns tend to pickup more wind and handling noise.

2- I'm curious as to the Rode NTG2 compared to the AT897. I haven't seen any clips comparing both mics.

The NTG-2 is a good alternative to the AT897.

The NTG-2 is a good alternative to the AT897.

Having both, I'd say that that the NTG-2 is an alternative to the 897. NTG2 is a little hotter, but isn't as smooth sounding. 897 has a little bump at the top which can be challenging for close-in V/O work, but it's sweet at a longer distance. Where you'll really note the difference is if you use them both indoors where there is a reverberant/live room. The NTG-2 turns pretty muddy, while the 897 has a marginally useful sound.
(Using a shotgun in a medium sized indoor space will quickly show you the weak spots of the mic. Keep in mind the only time you'll really use a shotgun indoors is for V/O work)

Thanks for the confirmation, Spot.